Loans

1
Your Virtual Life?
Lets take a look at what an average student in
the US will experience with when borrowing money
for college. We will use the current average loan
amount and federal loan agency rates.
2

• Right click on sheet tab name at the bottom of
  the page.
• Select Insert....
• Switch to the Spreadsheet Solutions tab. Notice
  some of the useful templates for business and
  personal use.
• Select Loan Amortization.
• Change the name of this sheets bottom tab to
  Sallie Mae.

3

• Put the following information in the appropriate
  box
• Lender name Sallie Mae
• Loan amount 23,000
• Annual interest rate 6.8
• Loan period in years 10
• Number of payments per year 12
• Start date of loan (Use this upcoming December
  1st)

4

• Notice how much your monthly payment is every
  month for the next 10 years.
• Notice how much total interest you paid back
  (upper right corner) beyond the amount you
  borrowed.

5
Car Loan
Youve just gotten out of school and nailed down
your first job. So, lets buy a car to get to
work. Pick a reasonable car of choice by doing a
Google search using the phrase type of car
followed by MSRP. You will finance the entire
amount since you spent all of the rest of your
money going to college!
6
Open a new loan amortization sheet and change the
bottom tab name of this sheet to Car Loan.

• Put the following information in the appropriate
  box
• Lender name Valley National
• Loan amount Your MSRP
• Annual interest rate 4.15
• Loan period in years 5
• Number of payments per year 12
• Start date of loan (Use this 1st day of the next
  upcoming month)

7

• Notice how much your monthly payment is every
  month for the next 5 years.
• Notice how much total interest you paid back
  beyond the amount you borrowed.

8
Graduate Degree Loan

• Now lets see what someone that wants to go on to
  a graduate degree program might experience.
• USA Today reported that "Tom Dillon, 19, a
  pre-pharmacy major at the University of
  Connecticut, is carrying 52,000 in student
  loans. And he's just getting started. When he
  gets his pharmacy doctorate in four years, he
  expects his debt to exceed 150,000!

9
Open a new loan amortization sheet and change the
bottom tab name of this sheet to Dillon.

• Put the following information in the appropriate
  box
• Lender name Wells Fargo
• Loan amount 150,000
• Annual interest rate 6.8
• Loan period in years 20
• Number of payments per year 12
• Start date of loan (Use this upcoming December
  1st)

10

• Notice how much your monthly payment is every
  month for the next 20 years!!!
• Notice how much total interest you paid back
  beyond the amount you borrowed!!!
• A little scary huh?

11

• House Loan/ Mortgage
• Now lets se what it would be like to try and buy
  a house after you graduate and start your first
  job.

12

• A very average house might cost 400,000 in this
  area. Banks might expect you to put 10 as a
  downpayment before being willing to loan you the
  remainder ... So first I hope you have 40,000
  savedwhen you walk in the bank to get the loan!

13
Open a new loan amortization sheet and change the
bottom tab name of this sheet to Mortgage.

• Put the following information in the appropriate
  box
• Lender name TD
• Loan amount 360,000
• Annual interest rate 6.59
• Loan period in years 30
• Number of payments per year 12
• Start date of loan (Use this upcoming December
  1st)

14
Notice how much your monthly payment is every
month for the next 30 years!!!Notice how much
total interest you paid back beyond the amount
you borrowed!!!In your head, add the Property
Tax to the monthly payment (900)!!!. . . hmmm
. . . What have we learned?