FV Function Problem

[Guest]

I'm doing an auto loan amortization and getting conflicting results with
similar Excel functions. I'm looking at a GM loan of 1.9% for 4 years on a
loan of $32,000, and trying to obtain the total cost of loan, P+I. If I do a
FV(0.019/12,48,,32000,0) I get $34,524. However, if I use several online
auto loan calculators I get $33,257. I can obtain the latter result by using
$32,000 + CUMIPMT(0.019/12,48,32000,1,48,0). But shouldn't the FV
calculation agree, or am I incorrect in trying to use a compound interest
formula with an amortization application?

BTW, CUMIPMT requires the Analysis Toopak Addin.

Thanks!!

Terry

 

[Andy Wiggins]

This file might be a help:
http://www.bygsoftware.com/examples/zipfiles/Loan_Calculator.zip

... except that it arrives at a figure of $34,432. This file also shows the
loan replayment schedule.

It's in the "Accountants" section on page:
http://www.bygsoftware.com/examples/examples.htm
This workbook includes two worksheets that can help you calculate the likely
repayments you will have to make on mortgages and personal loans (including
HP and conditional sale agreements).

 

[N Harkawat]

The reason you are getting different results is becase when you use CUMIPMT
excel is assuming that you are paying down your debt every month for 48
months and hence each successive months interest cost keeps coming down and
thus total interest paid is only 1257.
However when using FV the principal gets simply compunded ( no paying down
of loan) and is therefore higher than above

 

[Guest]

That's what I suspected, but wasn't sure. Thanks very much for your reply!!

Terry