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
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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