hard20 pts · first answer countsexcel-modelling

Handling an interest circularity

In your model, interest is calculated on the average debt balance, while debt repayment depends on cash after interest. Excel flags a circular reference. What is a sound way to handle it?

A.Delete the interest lineB.Hard-code interest each periodC.Switch Excel to manual calculation and never recalculateD.Enable iterative calculation with a circuit-breaker switch, or calculate interest on the opening balance

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Handling an interest circularity

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