Additional Present value calculations - MGF301

Additional Present value calculations - MGF301 - 19 $100.00...

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Monthly Compounding Example: What is PV of $100/month for 5 years and $1,0 end of each year? Assume monthly discountin Step 1: Find PV of 60 monthly payments Formula: =pv(.08/12,60,-100) PV = $4,931.84 Step 2: Find EAR of 8% annual rate compound Formula: EAR = [(1 + (r/m))^m] -1 EAR= 0.08 Step 3: Find PV of 5 annual payments at EAR Formula: =pv(.083,5,-1000) PV = $3,961.34
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PV= $8,893.18
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000 payments at the ng at an 8% annual rate ded monthly = 8.30 %
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Monthly Compounding Example Discount rate = 0.67% Time Period FV PV 1 $100.00 $99.34 2 $100.00 $98.68 3 $100.00 $98.03 4 $100.00 $97.38 5 $100.00 $96.73 6 $100.00 $96.09 7 $100.00 $95.46 8 $100.00 $94.82 9 $100.00 $94.20 10 $100.00 $93.57 11 $100.00 $92.95 12 $1,100.00 $1,015.70 13 $100.00 $91.72 14 $100.00 $91.12 15 $100.00 $90.51 16 $100.00 $89.91 17 $100.00 $89.32 18 $100.00 $88.73
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Unformatted text preview: 19 $100.00 $88.14 20 $100.00 $87.56 21 $100.00 $86.98 22 $100.00 $86.40 23 $100.00 $85.83 24 $1,100.00 $937.86 25 $100.00 $84.70 26 $100.00 $84.13 27 $100.00 $83.58 28 $100.00 $83.02 29 $100.00 $82.47 30 $100.00 $81.93 31 $100.00 $81.38 32 $100.00 $80.85 33 $100.00 $80.31 34 $100.00 $79.78 35 $100.00 $79.25 36 $1,100.00 $865.98 37 $100.00 $78.20 38 $100.00 $77.69 39 $100.00 $77.17 40 $100.00 $76.66 41 $100.00 $76.15 42 $100.00 $75.65 43 $100.00 $75.15 44 $100.00 $74.65 45 $100.00 $74.16 46 $100.00 $73.66 47 $100.00 $73.18 48 $1,100.00 $799.61 49 $100.00 $72.21 50 $100.00 $71.73 51 $100.00 $71.26 52 $100.00 $70.79 53 $100.00 $70.32 54 $100.00 $69.85 55 $100.00 $69.39 56 $100.00 $68.93 57 $100.00 $68.47 58 $100.00 $68.02 59 $100.00 $67.57 60 $1,100.00 $738.33 Total $11,000.00 $8,893.19...
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This note was uploaded on 08/30/2011 for the course MGF 301 taught by Professor Mohr during the Fall '08 term at SUNY Buffalo.

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Additional Present value calculations - MGF301 - 19 $100.00...

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