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Iris_Padilla_ADCO5190_P2_35 - Ch 02 P 35 Build a Model...

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Ch 02 P 35 Build a Model Chapter 2. Ch 02 P 35 Build a Model Inputs: PV = 1000 I = 10% N = 5 Formula: FV = PV(1+I)^N = $1,610.51 Wizard (FV): $1,610.51 Experiment by changing the input values to see how quickly the output values change. Years (D10): Interest Rate (D9) $1,610.51 0% 5% 20% 0 $1,000.00 $1,000.00 $1,000.00 1 $1,000.00 $1,050.00 $1,200.00 2 $1,000.00 $1,102.50 $1,440.00 3 $1,000.00 $1,157.63 $1,728.00 4 $1,000.00 $1,215.51 $2,073.60 5 $1,000.00 $1,276.28 $2,488.32 a. Find the FV of $1,000 invested to earn 10% after 5 years. Answer this question by using a math formula using the Excel function wizard. Note: When you use the wizard and fill in the menu items, the result is the formula you see on the formula line if y pointer on cell E12. Put the pointer on E12 and then click the function wizard (fx) to see the completed menu. Fin b. Now create a table that shows the FV at 0%, 5%, and 20% for 0, 1, 2, 3, 4, and 5 years. Then create a gr years on the horizontal axis and FV on the vertical axis to display your results. Begin by typing in the row and column labels as shown below. We could fill in the table by inserting formulas in al a better way is to use an Excel data table as described in 07model. We used the data table procedure. Note that the To create the graph, first select the range C33:E38. Then click the chart wizard. Then follow the menu. It is easy t but a lot of detailed steps are involved to format it so that it's "pretty." Pretty charts are generally not necessary t Note that the inputs to the data table, hence to the graph, are now in the row and column heads. Change the 10% in (or 20%), then to .3, then to .5, etc., to see how the table and the chart changes. $2,000.00 $2,500.00 $3,000.00 FV Graph 0% lue
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Inputs: FV = 1000 I = 10% N = 5 Formula: PV = FV/(1+I)^N = $620.92 Wizard (PV): $620.92 d. A security has a cost of $1,000 and will return $2,000 after 5 years. What rate of return does the security provide? Inputs: PV = -1000 FV = 2000 I = ?
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