02 Case model

# 02 Case model - 02 Case model 3/22/10 7:08 AM 2/17/2006...

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02 Case model 3/22/10 7:08 AM 2/17/2006 Chapter 2. Time Value of Money PART B (1) What's the future value of \$100 after 3 years if it earns 10%, annual compounding? Interest rate 10% 0 1 2 3 | | | | \$100 FV (in year n) :: \$110.00 \$121.00 \$133.10 FV (using Excel function) :: \$133.10 Interest rate 10% 0 1 2 3 | | | | \$100 PV (in year n) :: \$75.13 \$82.64 \$90.91 FV (using Excel function) :: \$75.13 PART C What annual interest rate would cause \$100 to grow to \$125.97 in 3 years? PV \$100.00 FV \$125.97 Years 3 Interest rate 8.00% PART D Interest rate 20% Time it takes to double 3.80 This spreadsheet model is designed to be used in conjunction with the chapter's integrated case and the related PowerPoint slide presentation. (2) What's the present value of \$100 to be received in 3 years if the interest rate is 10%, annual compounding? If a company’s sales are growing at a rate of 20% annually, how long will it take sales to double?

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PART F (1) What is the future value of a 3-year, \$100 ordinary annuity if the annual interest rate is 10%?
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## 02 Case model - 02 Case model 3/22/10 7:08 AM 2/17/2006...

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