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Unformatted text preview: TIME VALUE OF MONEY Usins Excel Spreadsheet By Dr. M. Metghalchi NOTE This was written for Excel 2003. For Excel 2007, just click on Formula then Financial Example 1 What is the future value $800 at 6% compounded annually after 5 years? Excel Solution PV 800 interest 6% no of period 5 Payment 0 it is not an annuity ($1,070.58) Click on Insert, Click on function, highlight finacial and FV (for future value), for rate enter B9 For number of period, enter cell B10, for payment, enter cell B11, for PV, enter cell B8. For type, enter 0.(0 if end of period and 1 if beginning of period).Then click on OK The Answer is $1,070.58 If you change any input variable, your answer automatically chages. EXAMPLE 2 What is the value 0f $100 compounded quarterly at 8 % after two years. PV 100 interest 2% No. of period 8 Payment 0 it is not an annuity ($117.17) Click on Insert, Click on function, highlight finacial and FV, for rate enter cell B23 For number of period, enter cell B24, for payment, enter cell B25, for PV enter cell B22. For type, enter 0. (0 if end of period and 1 if beginning of period). Then click on OK The answer is $117.17 change any input variable, your answer automatically chages. What if analysis EXAMPLE 3 What is the PV of $1700 to be received in 8 years at 8% compounded annually PV ? interest 8% No. of period 8 Payment FV 1700 ($918.46) Click on Insert, Click on function, highlight finacial and PV, for rate enter cell B37. For number of period, enter cell B38, for payment, enter cell B39, for FV, enter cell B40....
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This note was uploaded on 09/21/2011 for the course FINANCE 4320 taught by Professor Omaralnasser during the Spring '11 term at University of HoustonVictoria.
 Spring '11
 OmarAlNasser
 Time Value Of Money, Future Value

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