Calibri ' ' General lille DO Wrap Text Merge Center B IU . $ % 9.2 Constional Format as Cell Formatge Styles net Deste format ter Clipboard Ft AutoSave On H2 - FB A 1 You have the below list of debts. 3 Creditor Discover Card Bank Loan Apple Store Best Buy Target APR Balance Minimum Payment Priority of payments made 19.99% 2,000.00 $ 50.00 3 6.99% $ 4,000.00 $ 100.00 5 24.99% $ 750.00 $ 30.00 1 21.99% $ 1,200.00 $ 40.00 2 14.99% $ 400.00 $ 25.00 4 You have $500 a month of income that can be fully used to payoff debts. 1 Your Objective: Be debt free as quickly as possible, minimize the total amount of interest you will pay. 1. Complete the entire yellow section of the worksheet Payoff Strategy' to show how you would pay each creditor from now until all debts are paid off. 2. Complete the yellow section above to show the order in which you prioritized the debts, and how long it took to pay off each debt. s Hints: 1. First, determine the order in which you should pay off the debts, considering your objective. Cells E4 through E8. 2. Fill in rows 4, 5, and 6 of the payoff strategy with the information for each of the debts. 3. Fill in the associated minimum payment for Month 1 for all the debts, except priority 1. 4. Determine how much can be paid to Priority 1 Debt. 5. Calculate the interest you will pay for each debt. Formula: Interest - Prior Balance - (APR/12) 6. Calculate the new balance for each debt. Formula: New Balance Prior Balance Payment + Interest F3B X A B E 18 2. Fill in rows 4,5, and 6 of the payoff strategy with the information for each of the debts. 19 3. Fill in the associated minimum payment for Month 1 for all the debts, except priority 1. 20 4. Determine how much can be paid to Priority 1 Debt. 21 5. Calculate the interest you will pay for each debt. Formula: Interest - Prior Balance (APR/12) 22 6. Calculate the new balance for each debt. Formula: New Balance = Prior Balance - Payment + Interest 23 7. Repeat for each month until debt 1 is paid off. 24 8. Now calculate the new payment amount for Debt 2. 25 9. Calculate the interest you will pay for each of the remaing debts. Formula: Interest = New Balance - (APR/12) 26 10. Calculate the new balance for each debt. Formula: New Balance = Prior Balance - Payment + Interest 27 11. Repeat the process until Debt 2 is paid off. 28 12. Now calculate the payment for Debt 3. 29 13. Continue for all debts until all are payed off. 30 14. Fill in # of payments made for each of the debts above. Cells F4 through F8. 31 32 33 34 35 36 37 38 39 Instructions Payoff Strategy Clipboard Font Algement utosave Number Shes X > Best Buy Name Starting Balance APR % Month B D G H K M N O Priority 1 Debt Priority 2 Debt Priority 3 Debt Priority 4 Debt Priority 5 Debt Apple Store Discover Card Target Bank Loan 750 1200 2000 400 4000 24.99 21.99 19.99 14.99 6.99 Payment Interest Balance Payment Interest Balance Payment Interest Balance Payment Interest Balance Payment Interest Balance 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Instructions Payoff Strategy O TI Type here to search oo a Calibri ' ' General lille DO Wrap Text Merge Center B IU . $ % 9.2 Constional Format as Cell Formatge Styles net Deste format ter Clipboard Ft AutoSave On H2 - FB A 1 You have the below list of debts. 3 Creditor Discover Card Bank Loan Apple Store Best Buy Target APR Balance Minimum Payment Priority of payments made 19.99% 2,000.00 $ 50.00 3 6.99% $ 4,000.00 $ 100.00 5 24.99% $ 750.00 $ 30.00 1 21.99% $ 1,200.00 $ 40.00 2 14.99% $ 400.00 $ 25.00 4 You have $500 a month of income that can be fully used to payoff debts. 1 Your Objective: Be debt free as quickly as possible, minimize the total amount of interest you will pay. 1. Complete the entire yellow section of the worksheet Payoff Strategy' to show how you would pay each creditor from now until all debts are paid off. 2. Complete the yellow section above to show the order in which you prioritized the debts, and how long it took to pay off each debt. s Hints: 1. First, determine the order in which you should pay off the debts, considering your objective. Cells E4 through E8. 2. Fill in rows 4, 5, and 6 of the payoff strategy with the information for each of the debts. 3. Fill in the associated minimum payment for Month 1 for all the debts, except priority 1. 4. Determine how much can be paid to Priority 1 Debt. 5. Calculate the interest you will pay for each debt. Formula: Interest - Prior Balance - (APR/12) 6. Calculate the new balance for each debt. Formula: New Balance Prior Balance Payment + Interest F3B X A B E 18 2. Fill in rows 4,5, and 6 of the payoff strategy with the information for each of the debts. 19 3. Fill in the associated minimum payment for Month 1 for all the debts, except priority 1. 20 4. Determine how much can be paid to Priority 1 Debt. 21 5. Calculate the interest you will pay for each debt. Formula: Interest - Prior Balance (APR/12) 22 6. Calculate the new balance for each debt. Formula: New Balance = Prior Balance - Payment + Interest 23 7. Repeat for each month until debt 1 is paid off. 24 8. Now calculate the new payment amount for Debt 2. 25 9. Calculate the interest you will pay for each of the remaing debts. Formula: Interest = New Balance - (APR/12) 26 10. Calculate the new balance for each debt. Formula: New Balance = Prior Balance - Payment + Interest 27 11. Repeat the process until Debt 2 is paid off. 28 12. Now calculate the payment for Debt 3. 29 13. Continue for all debts until all are payed off. 30 14. Fill in # of payments made for each of the debts above. Cells F4 through F8. 31 32 33 34 35 36 37 38 39 Instructions Payoff Strategy Clipboard Font Algement utosave Number Shes X > Best Buy Name Starting Balance APR % Month B D G H K M N O Priority 1 Debt Priority 2 Debt Priority 3 Debt Priority 4 Debt Priority 5 Debt Apple Store Discover Card Target Bank Loan 750 1200 2000 400 4000 24.99 21.99 19.99 14.99 6.99 Payment Interest Balance Payment Interest Balance Payment Interest Balance Payment Interest Balance Payment Interest Balance 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Instructions Payoff Strategy O TI Type here to search oo a