# Blended Interest Rate

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.