How to calculate Borrowing Power

[dan_the_man]

I am trying to get a formula that calculates borrowing power. I have the following fields: monthly repayments, interest rate, term in years. Thankyou in advance for any help.

 

[Akashwani]

Hi,

Welcome to MrExcel.

Take a look here....

http://www.youtube.com/user/ExcelIsFun#p/search/2/iz1SlgnYE7I

If this doesn't fit the bill then Mike has plenty of other financial videos, just type Loan or Payments into the search box.

Good look.

Ak

 

[Richard Schollar]

Hi

Use th PV formula to calculate the implied maximum amount you can borrow:

<b>Excel 2010</b><table cellpadding="2.5px" rules="all" style=";background-color: #FFFFFF;border: 1px solid;border-collapse: collapse; border-color: #BBB"><colgroup><col style="background-color: #DAE7F5" /><col /><col /></colgroup><thead><tr style=" background-color: #DAE7F5;text-align: center;color: #161120"><th></th><th>C</th><th>D</th></tr></thead><tbody><tr ><td width="25px" style="color: #161120;text-align: center;">1</td><td width="63px" style="text-align: right;;">5%</td><td width="120px" style=";">Rate (nominal per annum)</td></tr><tr ><td width="25px" style="color: #161120;text-align: center;">2</td><td width="63px" style="text-align: right;;">25</td><td width="63px" style=";">Term (Years)</td></tr><tr ><td width="25px" style="color: #161120;text-align: center;">3</td><td width="63px" style="text-align: right;;">800</td><td width="63px" style=";">Monthly Repayment</td></tr><tr ><td width="25px" style="color: #161120;text-align: center;">4</td><td width="63px" style="text-align: right;;">£136,848.04</td><td width="120px" style=";">Implied borrowing capacity (repayments in arrears)</td></tr></tbody></table><p style="width:3.6em;font-weight:bold;margin:0;padding:0.2em 0.6em 0.2em 0.5em;border: 1px solid #BBB;border-top:none;text-align: center;background-color: #DAE7F5;color: #161120">Sheet1</p><br /><br /><table cellpadding="2.5px" rules="all" style=";border: 2px solid black;border-collapse:collapse;padding: 0.4em;background-color: #FFFFFF" ><tr><td style="padding:6px" ><b>Worksheet Formulas</b><table cellpadding="2.5px" width="100%" rules="all" style="border: 1px solid;text-align:center;background-color: #FFFFFF;border-collapse: collapse; border-color: #BBB"><thead><tr style=" background-color: #DAE7F5;color: #161120"><th width="10px">Cell</th><th style="text-align:left;padding-left:5px;">Formula</th></tr></thead><tbody><tr><th width="10px" style=" background-color: #DAE7F5;color: #161120">C4</th><td style="text-align:left">=PV(<font color="Blue">C1/12,C2*12,-C3</font>)</td></tr></tbody></table></td></tr></table><br />

 

[LearnMeExcel]

Richard
could you help me to find where i can learn all financial Formula

 

[Richard Schollar]

Richard
could you help me to find where i can learn all financial Formula

I'm not sure I have anything specific I can mention - the financial functions haven't (in my experience) got a lot of press and I can't think of any book that covers them in any detail. It's probably worthwhile reviewing the actual maths behind annuities and loans and effective and nominal rates (I would do this by using your favourite search engine or Wikipedia is always a good resource). The Excel help files on the various functions can be a useful guide too.