How much in interest will organization pay over three years

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Reference no: EM131981019

You work for We Build the World Manufacturing Inc. The company has decided to get a three year loan to purchase a high end lathe for $1M. The current interest rate is 6%. Your job is to calculate the monthly interest payments by building a loan amortization table.

The model should have three areas:

1. Documentation: Explaining the purpose of the model

2. Input; There are three inputs required for this model, annual interest rate, number of months of the loan, and the loan amount

3. Formula/Output Area: As shown on the example for a $500 loan for twelve months, the inputs are feeding the calculations in the Formula/Output Area.

Answer the following questions:

Assuming the original assumptions, how much in interest will the organization pay over 3 years?

If the interest rate drops to 3%, what impact does that have on interest payments?

Reference no: EM131981019

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