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Financial Function Mini Challenge

Ishan is applying for commercial vehicle loans to finance new delivery vans for Food2Go. He received information on 5 loan products from various banks, but the descriptions were incomplete. The document provides details on the 5 loans (A-E) and asks to fill in missing information like principal, interest rate, payment amounts, etc. using financial functions.

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GLOBAL ARCUS
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32 views22 pages

Financial Function Mini Challenge

Ishan is applying for commercial vehicle loans to finance new delivery vans for Food2Go. He received information on 5 loan products from various banks, but the descriptions were incomplete. The document provides details on the 5 loans (A-E) and asks to fill in missing information like principal, interest rate, payment amounts, etc. using financial functions.

Uploaded by

GLOBAL ARCUS
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Mini Challenge

Food2Go is acquiring new delivery vans! Ishan plans to apply for som
commercial vehicle loans to service the cost of these delivery vans. A
contacting several banks for their loan offerings, he received informa
five products. However, all of their loan descriptions were incomplet
some lacking payment periods and some even missing interest rates

Let's use Financial Functions to help Ishan out.


There are five worksheets containing information on the five differen
products (Loans A-E).

Read the loan descriptions for each loan carefully, then key in the res
information about the loan in the table below. The cells in green req
you to apply financial functions to obtain the required information
Express all your results in positive numbers!

Compare your answers for each of the loans in the respective Solutio
worksheets.
ns to apply for some
se delivery vans. After
e received information on
ns were incomplete, with
sing interest rates!

on the five different

then key in the respective


cells in green require
uired information.

respective Solution
Commercial Vehicle Loan A
To: Ishan (Food2Go)
Subject: Enquiry about your company's auto loan

Good day Sir,


We are pleased to offer an auto loan to your company
totalling $80,000. The loan will be repaid over five
years, with an annual interest rate of 3%.

Kindly inform us if you wish to take up the loan. Thank


you.
XYZ Bank

Variable Value
Principal
Interest rate
Loan term (years)
Payment/month (total)
Payment for first month (principal)
Payment for first month (interest)
Commercial Vehicle Loan A
To: Ishan (Food2Go)
Subject: Enquiry about your company's auto loan

Good day Sir,


We are pleased to offer an auto loan to your company
totalling $80,000. The loan will be repaid over five
years, with an annual interest rate of 3%.

Kindly inform us if you wish to take up the loan. Thank


you.
XYZ Bank

Variable Value
Principal $80,000
Interest rate 3.00%
Loan term (years) 5
Payment/month (total) $1,437.50
Payment for first month (principal) $1,237.50
Payment for first month (interest) $200.00
Commercial Vehicle Loan B
To: Ishan (Food2Go)
Subject: About your car loan

Dear Sir,

Thank you for writing in about your interest pertaining


to our car loan products.

We will be able to arrange for 6-year car loan for a


sum of $75,000. You would be expected to pay $1,100
per month throughout the payment period.

Thank you very much for your consideration.


HighLow Credit

Variable Value
Principal
Payment/month (total)
Loan term (years)
Interest rate
Commercial Vehicle Loan B
To: Ishan (Food2Go)
Subject: About your car loan

Dear Sir,

Thank you for writing in about your interest pertaining


to our car loan products.

We will be able to arrange for 6-year car loan for a


sum of $75,000. You would be expected to pay $1,100
per month throughout the payment period.

Thank you very much for your consideration.


HighLow Credit

Variable Value
Principal $75,000
Payment/month (total) $1,100.00
Loan term (years) 6
Interest rate 1.81%
Commercial Vehicle Loan C
To: Ishan (Food2Go)
Subject: Loan details

Mr Ishan,

Thank you for the conversation we had earlier.

Our company will be most willing to extend a 4.5 year


loan to you, at an attractive interest rate of 2% per
year. You will be expected to pay around $1,050 per
month to cover both the principal and interest.
Do let us know if you would like to follow up with this
loan.

Simple Finance

Variable Value
Interest rate
Payment/month (total)
Loan term (years)
Principal
Commercial Vehicle Loan C
To: Ishan (Food2Go)
Subject: Loan details

Mr Ishan,

Thank you for the conversation we had earlier.


Our company will be most willing to extend a 4.5 year
loan to you, at an attractive interest rate of 2% per
year. You will be expected to pay around $1,050 per
month to cover both the principal and interest.

Do let us know if you would like to follow up with this


loan.
Simple Finance

Variable Value
Interest rate 2.00%
Payment/month (total) $1,050.00
Loan term (years) 4.5
Principal $54,180
Commercial Vehicle Loan D
To: Ishan (Food2Go)
Subject: Food2Go - Commercial Vehicle Loan

Dear Mr Ishan (Food2Go),

Thank you for providing more information about your


company's requirements.

We are pleased to extend a loan amounting to


$85,000 to your company at an interest rate of 2.5%.
With fixed regular payments, you can expect to pay
$1,200 per month to service the debt.

Hoping to hear from you!

Fast Capital

Variable Value
Interest rate
Payment/month (total)
Principal
Loan term (years)
Commercial Vehicle Loan D
To: Ishan (Food2Go)
Subject: Food2Go - Commercial Vehicle Loan

Dear Mr Ishan (Food2Go),

Thank you for providing more information about your


company's requirements.

We are pleased to extend a loan amounting to


$85,000 to your company at an interest rate of 2.5%.
With fixed regular payments, you can expect to pay
$1,200 per month to service the debt.

Hoping to hear from you!

Fast Capital

Variable Value
Interest rate 2.50%
Payment/month (total) $1,200.00
Principal $85,000
Loan term (years) 6.39
Commercial Vehicle Loan E
To: Ishan (Food2Go)
Subject: Your loan scenario

Good afternoon, Mr Ishan (Food2Go),

Thank you for explaining your company's loan


circumstance to us.

We understand you are able to provide maximum


monthly payments of $1100. We are able to provide a
loan of $60000 for an initial period of four years, at an
interest rate of 1.5%. Subsequently, after the four
years term, we can discuss about the refinancing of
the remaining principal and accumulted interest.

Please feel free to contact us for any enquiries.

Flexi Credit

Variable Value
Interest rate
Payment/month (total)
Principal
Initial loan term (years)
Amount remaining after initial financing
Commercial Vehicle Loan E
To: Ishan (Food2Go)
Subject: Your loan scenario

Good afternoon, Mr Ishan (Food2Go),

Thank you for explaining your company's loan


circumstance to us.

We understand you are able to provide maximum


monthly payments of $1100. We are able to provide a
loan of $60000 for an initial period of four years, at an
interest rate of 1.5%. Subsequently, after the four
years term, we can discuss about the refinancing of
the remaining principal and accumulted interest.

Please feel free to contact us for any enquiries.

Flexi Credit

Variable Value
Interest rate 1.50%
Payment/month (total) $1,100.00
Principal $60,000
Initial loan term (years) 4.00
Amount remaining after initial financing $9,327

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