This section provides fundamental knowledge of financial concepts, including types of interest, net present value (NPV), internal rate of return (IRR), and depreciation. These concepts are crucial for project evaluation, making informed decisions, and managing debts.
Part Two: Interest, Depreciation and Developing an Amortization Schedule
This section covers different types of interest, including simple and compound interest, and various methods for calculating depreciation. We will learn how to use functions like PMT, IPMT, and PPMT in Excel to calculate monthly payments, interest, and principal amounts. Different methods of depreciation, including straight-line and declining balance depreciation, will also be covered. We will also explore how to use the =SLN and =DDB functions in Excel to calculate straight-line and double-declining balance depreciation, respectively. This section will introduce the creation of an amortization schedule for a loan in Excel. We will learn how to use functions like PMT, IPMT, and PPMT to calculate monthly payments, interest, and principal amounts. A table for the amortization schedule, including month, monthly payment, interest, principal, and remaining principal, will be created.
In this section, we will learn the basic steps for creating a financial model. We will explore how to create simple financial models and forecasts in Excel to aid in financial decision-making. Video demonstrations and practical exercises will be included for better understanding.