First we calculate Monthly Payment using PMT Function in Excel:

=pmt(rate,nper,-pv,fv)

Here,

PMT = Monthly Payment = ?

Rate = 6.44%/12

Nper = 6 years* 12 months = 72 months

PV = $40,800

FV = 0

Substituting the values in formula:

=pmt(6.44%/12,72,-40800,0)

PMT or Monthly Payment = $684.68

 

Now we calculate Present Value using PV Function in Excel:

=-pv(rate,nper,pmt,fv)

Here,

PV = Present Value = ?

Rate = 6.44%/12

Nper = 72-14 = 58 months 

PMT = $684.68

FV = 0

Substituting the values in formula:

=-pv(6.44%/12,58,684.68,0)

PV or Present Value = $34,047.52

Ho, He must give 34,047.52 to the bank.