C268 Practice Exam Questions and Answers (Complete Solution)

Amortiza

tion

Scenario: You have decided to purchase a new car. You plan to take out a loan to pay for the car. The loan amount is $18,900. You will pay an

interest rate of 6.5% and plan to pay off the car in 48 months. You want to calculate the total amount of money and the total amount of interest

you will pay over the course of the loan. To help you with these calculations, you decide to construct an amortization table. An amortization

table provides details about the payment, interest amount, principal amount, and loan balance for every month of the loan. Perform the tasks

below to complete the amortization table and loan summary calculations.

1. Calculate the payment amount for the loan in cell C15. Reference the cells containing the appropriate loan information as the arguments

for the function you use. Cells C20–C67 in the "Payment" column are populated with the payment amount from cell C15.

=PMT(C13/12,C12,C11)

2. Calculate, in cell D20, the interest amount for period 1 by multiplying the balance in period 0 (cell F19) by the loan interest rate (cell

C13) divided by 12. Dividing the interest rate by 12 results in the monthly interest rate. This formula is reusable. The interest for a given

period is always the monthly interest rate times the balance from the previous period.

=F19*0.65/12

3. Copy the interest amount calculation down to complete the "Interest" column of the amortization

table. Ctrl + c then double click the bottom right corner

4. Calculate, in cell E20, the principal amount for period 1. The principal amount is the difference between the payment amount (cell C20) and

the interest amount (cell D20) for period 1. Construct your formula in such a way that it can be reused to complete the "principal" column of

the amortization table.

=C20-D20

5. Copy the principal amount calculation down to complete the "principal" column of the amortization

table. Ctrl + c then double click the bottom right corner

6. Calculate, in cell F20, the balance for period 1. The balance is the difference between the balance for period 0 (cell F19) and the

principal amount for period 1 (cell E20). This formula is reusable. The balance is always calculated as the difference between the balance

from the previous period and the principal amount for the current period.

=F19-E20:E20

7. Copy the balance amount calculation down to complete the "Balance" column of the amortization

table. Ctrl + c then double click the bottom right corner

8. Calculate, in cell G12, the total amount paid by multiplying the payment amount (cell C15) by the term of the loan (cell C12).

=C15*C12

9. Calculate the total interest paid in cell G13. The total interest paid is the sum of all interest paid in the "Interest" column of the

amortization table.

=SUM(D20:D67)

10.Check to see if the total interest calculation in the amortization table is correct. The total interest paid is also equal to the difference

between the total amount paid over the course of the loan and the original loan amount. Insert a formula into cell G14 to calculate the

difference between the total amount paid and the original loan amount. Notice the negative sign associated with the original loan amount. This

value should equal the total interest calculated using the amortization table

=G12+C11

11. Assume you have made the first 36 payments on your loan. You want to trade the car in for a new car. You believe that you can sell your

car for $4000. Will this cover the balance remaining on the car in period 36? Answer either "Yes" or "No" in cell G15 from the drop-down

menu.

Yes

Four J’s Painting

Scenario: Four J's Painting is a home painting contractor that completes interior painting work for new construction projects. Four J's Painting

has four employees: Jim, Jill, Jake, and Jennifer. You have been hired to determine how the company can be more efficient and provide better

service. You have tracked information on the last 20 painting projects in table 1. Employees receive bonuses for efficient and high-quality work.

Occasionally, some jobs require additional work to correct flaws (touch-up work). Information about the projects that required touch-up work

is stored in table 2. Table 3 summarizes information about the employees. Table 4 categorizes the projects according to difficulty. Complete

tables 1 through 4 to determine how to more efficiently and effectively run the company. Complete each task so that the formulas you use can

be copied and pasted down to complete the columns of the tables. Do not name your lookup tables; rather, you should keep them as

references (e.g. B16:C30).

1. Use the HLOOKUP function to complete the "Hourly Wage" column of table 1. Use the "Employee" column of table 1 as the lookup value

and the "Employee Wage Information" above table 1 as your reference table.

=HLOOKUP($D$16:$D$35,$E$11:$H$12,2,FALSE)

2. Use the AND function to complete the "Time Bonus?" column of table 1. An employee earns a time bonus if the project’s "Hours Worked"

are fewer than the "Estimated Hours" and if the work "Quality" is greater than 1.

=AND(C16>E16=TRUE,H16>1,(AND(E16<C16)))

3. Use the OR function to complete the "Outcome Bonus?" column of table 1. An employee earns an outcome bonus if the difficulty of a job

is greater than 3 or if the quality of their work is equal to 3.

=OR(G16>3,H16=3)

4. Use the IF function to complete the "Time Bonus $" column of table 1. If an employee earns a time bonus (i.e., the corresponding cell in the

"Time Bonus?" column is TRUE), then "Time Bonus $" is the "Job Pay" for that project times the bonus percentage in cell M11. Otherwise

"Time Bonus $" is 0.

=IF(I16=TRUE,K16*$M$11,0)

5. Use the IF function to complete the "Outcome Bonus $" column of table 1. If an employee earns an outcome bonus (i.e., the corresponding

cell in the "Outcome Bonus?" column is TRUE), then "Outcome Bonus $" is the "Job Pay" for that project times the outcome bonus

percentage in cell M12; otherwise, "Outcome Bonus $" is 0.

=IF(J16=TRUE,K16*$M$12,0)

6. Use the IF function to complete the "Comments" column of table 1. Display "Good Job" if both the "Hours Worked" are less than or equal to

the "Estimated Hours" for a project and the assessed "Quality" of that project is greater than 1. Display "Too Much Time" if the "Hours

Worked" on a project exceed the "Estimated Hours" for that project; otherwise, display "Poor Quality."

=IF(AND(E16<=C16,H16>1),"Good Job",IF(H16<1,"Poor Quality",IF(E16>C16,"Too Much Time","Poor Quality")))

7.Use the VLOOKUP function to complete the "Employee" column of table 2. Use "Job ID" from table 2 as your lookup_value(s) and table 1

as the reference table.

=VLOOKUP(B40,$B$16:$O$35,3,FALSE)

8. Use the VLOOKUP function to complete the "Difficulty" column of table 2. Again, use "Job ID" from table 2 as the lookup_value(s) and table

1 as the reference table.

=VLOOKUP(B40,$B$16:$O$35,6,FALSE)

9. Use the COUNTIF function to complete the "# of Jobs" column in table 3. Reference the appropriate field in table 1 as your range and

the "Employee" names in table 3 as your criteria.

=COUNTIF($D$16:$D$35,G39)

10. Use the SUMIF function to complete the "Total Hours" column in table 3. Reference the appropriate field in table 1 as your range and

the "Employee" names in table 3 as your criteria.

=SUMIF($D$16:$D$35,G39,$E$16:$E$35)

11. Use the SUMIF function to complete the "Total Pay" column in table 3. Reference the "Employee" field in table 1 as your range,

the "Employee" names in table 3 as your criteria, and the "Total Pay" field in table 1 as your sum range.

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