# Evaluating the Financial Impact of Loans and Investments

This is a paper that is focusing on Evaluating the Financial Impact of Loans and Investments. The paper also illustrates the chapters to focus in while writing the assignment sections.

## Evaluating the Financial Impact of Loans and Investments

This week we will see:
Chapter 6 “Evaluating the Financial Impact of Loans and Investments”

Level 1 explores some fundamental financial calculations to evaluate different financing options

Level 2 & 3, these basic concepts are expanded upon to develop a cash flow analysis and an amortization table, which is a schedule for paying off a loan.
You also will learn about Excel tools for calculating depreciation, a technique used to allocate the costs of an asset over its useful life.

Chapter # 6 – Level 1: Objectives (Pages 360 – 377)
Firstly, understand how simple interest and compound interest are calculated (page 360)
Secondly, determine the value of a loan payment (PMT Function) (page 363)
Thirdly, analyze positive and negative cash flows (pages 365)
Fourthly, determine the future value and the present value of a financial transaction (Using the RATE, NPER, PV, and FV Functions (pages 368)
Lastly, determine the interest rate and the number of periods of a financial transaction (page 372)

### Evaluating the Financial Impact of Loans and Investments

We will cover Levels 1, 2, and 3.

Chapter # 6 – Level 1: Objectives (Pages 360 – 377)
Firstly, understand how simple interest and compound interest are calculated (page 360)
Secondly, determine the value of a loan payment (PMT Function) (page 363)
Thirdly, analyze positive and negative cash flows (pages 365)
Fourthly, determine the future value and the present value of a financial transaction (Using the RATE, NPER, PV, and FV Functions (pages 368)
Lastly, determine the interest rate and the number of periods of a financial transaction (page 372)

Chapter # 6 – Level 2: Objectives (Pages 379 – 399)
Set up an amortization table to evaluate a loan
Create a sequence of numbers automatically
Calculate principal and interest payments
Calculate cumulative principal and interest payments
Set up named ranges for a list
Calculate depreciation and taxes

Chapter # 6 – Level 3: Objectives (Pages 401 – 415)
Set up a worksheet to analyze profitability
Calculate the net present value
Calculate the internal rate of return
Also, calculate the return on investment