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    Blended Interest Rate

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    Make a usable spreadsheet that can calculate the blended interest rate for 2 separate loans. Below is an example of the output data that this spreadsheet would produce for this particular scenario:

    Mortgage Loan Summary
    Loan one amount $250,000.00
    Interest Rate 5.25%
    Term 30 years
    Monthly payment $1,093.75 Interest Only
    Loan two amount $160,000.00
    Interest Rate 7.00%
    Term 30 years
    Monthly payment $933.33 Interest Only
    Total amount financed $410,000.00
    Total monthly payment $2,027.08
    Blended interest rate 5.933%

    I need a simple excel tool in which one may enter the amount and interest rate for two separate loans and amounts that calculates the blended interest rate for those two "interest-Only" loan amounts.

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    Solution Preview

    I have attached the required spread sheet with this.

    To calculate the monthly interest amount, we use the formula,

    Interest = Principal Amount * Number of years * rate of interest/100

    Since we are finding the monthly interest, the above formula changes to

    Interest amount = Principal Amount * (1/12) * rate of interest/100 -------- (1)

    1/12 ==> for one month, we in effect ...

    Solution Summary

    This shows how to create an excel spreadsheet to calculate blended interest rate.