calculating term of financial transaction

[Guest]

If I know the amount financed is $1,000 and the interest is $268.91 and the
interest rate is 24% and that is all I know, how do I work out the term of
the loan?
In this example the answer is 24months but I would like to know how to use
an excel function to achieve the result. I am assuming I don't know the
instalment

Regards

 

[Fred Smith]

You can use a combination of CUMIPMT and Goal Seek.

First, in, for example, a1, enter the formula:

=CUMIPMT(24%/12,a2,1000,1,a2,0)

When a2 has the correct term, this function will calculate the total interest of
the loan. Use Goal Seek to vary a2 until a1 returns $268.91.

 

[Guest]

This should work in principle but I didn't get the expected result.
But anyway thanks for your help

Bookman

 

[Fred Smith]

What result did you get? Let us know so we can help you get what you want.

 

[Guest]

Actually I can't gwet it to work.
If I put the CUMIPMT function in Cell a1 with a reference to cell A2
then goal seek
set a1 t0 -268.91 by changing cell A2 if iI leave A2 blank it won't work at
all
If I put a number (eg 10) in cell A2 I get a different result each time when
I know in this case the correct solution is 24

Regards

Bookman