A common personal and professional example that highlights key Excel financial functions are loan characteristics. Let's consider a loan with a present value of $20,000, an annual interest rate of 6%, with a 2-year payback period, Table 1 Using this information, calculate the following: - Convert the annual loan structure to quarterly and monthly - Monthly payment - Principal payment for a given payment - Interest payment for a given payment - Number of required payments - Future value of payments - NPV and IRR from the Lender's perspective

Table 1
Loan Structure
Loan principal	$ 20,000
Interest Rate (annual)	6.00%
Period (yrs)	2
Model
Convert Loan Structure
	Annual	Quarterly	Monthly
Loan principal	$ 20,000	$ 20,000	$ 20,000
Interest Rate	6.00%	1.50%	0.50%
Period	2	8	24
Monthly Payment
Excel Function: PMT to calculate the payment
PMT	Rate	Nper	Pv	Fv
($886.41)	0.50%	24	$ 20,000.00	0
Principal portion of a payment
Excel Function: PPMT to calculate the principal portion of a specific payment #
PPMT	Rate	Nper	Pv	Fv	Payment #
($882.00)	0.50%	24	$ 20,000.00	0	5
Interest portion of a payment
Excel Function: IPMT to calculate the interest portion of a specific payment #
IPMT	Rate	Nper	Pv	Fv	Payment #
($4.41)	0.50%	24	$ 20,000.00	0	5
Interest rate for a payment
Excel Function: Rate to calculate the interest rate based on a payment amount
PMT	Rate	Nper	Pv	Fv
$ (2,600.00)	0.88%	8	$ 20,000.00	0
Number of payments required
Excel Function: NPER to calculate the number of payment periods given a loan structure
PMT	Rate	Nper	Pv	Fv
$ (3,000.00)	1.50%	7.1	$ 20,000.00	0

I am trying this homework from the below directions. My input is in bold. I am very confused.

Model Formulation Steps 5. Convert loan structure a. Calculate the loan structure for Quarterly and Monthly b. Loan principle does not change. c. Interest rate is divided by the number of payment periods (e.g., Quarterly is 4 payments per year). d. The number of payments is multiplied by the new period (e.g., Monthly is 12 payments per year). 6. Excel function elements a. Rate = interest rate per period. b. Per = specifies the period and must be in the range 1 to nper. c. Nper = the total number of payment periods in an annuity. d. Pmt = the amount of the payment for the period. Note: payments are entered as negative values. e. Pv = the present value, the total amount that a series of future payments is worth now. f. Fv = the future value, or a cash balance you want to attain after the last payment is made. If omitted, fv is assumed to be 0. g. Type = indicates when payments are due. The default is at the end of the period. The default is acceptable for these tasks. 7. Monthly payment a. Using the monthly loan structure, calculate the monthly payment. b. Excel function: =PMT(rate, nper, pv, [fv], [type]) 8. Principal payment a. Using the monthly loan structure, calculate the monthly principal amount for payment #5. b. Excel function: =PPMT(rate, per, nper, pv, [fv], [type]) 9. Interest payment a. Using the monthly loan structure, calculate the monthly interest amount for payment #5. b. Excel function: =IPMT(rate, per, nper, pv, [fv], [type]) 10. Interest rate for a payment a. Using the quarterly loan structure, calculate the interest rate for a payment of $2600. b. Excel function: =RATE(nper, pmt, pv, [fv], [type]) 11. Number of required payments a. Using the quarterly loan structure, calculate the number of payment periods for a payment of $3000. b. Excel function: =NPER(rate, pmt, pv, [fv], [type])