Microsoft Excel Tutorial: Calculate Early Payoff of Debt.

Welcome back to the MrExcel netcast! In today's video, we're going to tackle a common household finance problem using the power of Excel. Have you ever received a credit card statement with a high balance and a seemingly never-ending payment plan? Well, we're going to show you how to use Excel to calculate the early payoff of your debt and potentially save yourself a significant amount of interest.

First, we start with a massive amount of data - the balance, interest rate, and minimum payment on your credit card statement. We'll use Excel's NPER function to determine the number of periods it will take to pay off the loan. By dividing the interest rate by 12 (since we're talking about monthly periods) and inputting the payment and present value, we can see that it will take 73 months to pay off the loan, with a total payment of $6,776.

But what if we want to pay off the loan sooner and save on interest? We can use Excel's What-If analysis to see the impact of increasing our payments. By doubling the payment to $184, we can pay off the loan in just 29 months, saving over $1,300 in interest. And if we can afford to make an extra $400 payment, we can pay off the loan in just 9 months!

Not only is this a useful tool for personal finance, but it also showcases the power of Excel's financial functions. You don't have to be a banker to use these tools - anyone can use Excel to solve basic household finance problems. So next time you receive a credit card statement, remember to fire up Excel and see how you can save yourself some money.

Thanks for watching this MrExcel netcast! Don't forget to like and subscribe for more Excel tips and tricks. And if you have any suggestions for future videos, leave them in the comments below. See you next time!

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Table of Contents:
(00:00) Calculate Early payoff of House Mortgage
(00:31) Using Excel's power to calculate payment periods
(00:49) Using the NPER function
(01:01) Walking through the function
(01:30) Total payment and interest calculation
(01:40) Doubling up payments to save on interest
(02:18) Using the function for What-If analysis
(02:58) Clicking Like really helps the algorithm

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This video answers these common search terms:
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What-If analysis in Excel
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Tom & Vicky ask about using Excel for basic household finance. Excel has a great suite of functions for this. Today, a look at using NPER to pay off your credit cards faster. Episode 998 shows you how.

This video is the podcast companion to the book, Learn Excel 97-2007 from MrExcel. Download a new two minute video every workday to learn one of the 377 tips from the book!

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