Excel model that will produce the following:

1.The net present value of a ten-year payment stream of $10,000 per month at 3% (assume the first payment is 30 days away)

2.An amortization table of the payment stream showing the allocation of each monthly payment to interest and principal

Make sure the following input variables can be changed:

Monthly payment amount

Interest rate

USING EXCEL TO CALCULATE NPV

Things to remember:

1.Excel assumes the first payment is one period away

a.Formula =NPV(RATE,Cell_Range)=NPV(4%,A1...A12)

b.If the first payment (Cell A1) is received on day 1, the formula should be:=A1+NPV(4%,A2...A12)

2.The rate must agree to the period of cash flows.Monthly payments using an annual rate of 4% should be shown as follows:=NPV((4%/12),A1....A12)