Critical anaylsis. Financial Functions

# Critical anaylsis. Financial Functions - year for 20 years,...

This preview shows pages 1–3. Sign up to view the full content.

Present Value Function i 5% n 8 FV \$1,000 PV \$676.84 using the formula PV (rate, nper, pmt, FV) =PV(D6,E6,0,D8) \$676.84 Future Value Function i 4% n 25 PV \$1,000 FV ? FV = \$2,665.84 FV(rate, nper, pmt, -PV) FV(D16, D17, 0, -D18) You deposit \$1,000 today into an IRA. It will earn 4% for the next 25 years. What is the future value of your investment? What is the present value of \$1,000 received 8 years from today if the discount rate is 5%?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Present Value Annuity Function i 12% nper 20 pmt \$3,000 Use PV function, (Rate, nper, pmt, FV) PV(.12,20,-3000,0) PV(c7, c8,-c9,0) \$22,408.33 Note that you have to put a negative in front of the PV amount to get a postive return. Future Value Annuity Function i 0.667% divide 8% by 12 nper 240 multiply 20 years by 12 Payment \$100 Use FV function FV(,667,240,-100,0) FV(c25,c26,-c27,0) \$58,902.04 What is the present value of a series of payments of \$3,000 each
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: year for 20 years, discounted at 12%? What will your value at retirement be if you deposit \$100 each month for the next 12 years? Your annual discount rate is 8%. Solving for Payment n 15 monthly 180 i 4.50% monthly 0.375% PV \$(250,000) FV \$- Use PMT =(.375,180,250000,0) \$1,912.48 monthly payment Solving for rate n 5 PV \$1,000 FV \$2,500 Use RATERATE(nper, pmt, pv, fv, 0, guess) 20% =RATE(5,0, 2500,-1000,0,.05) Over the next 15 years you want to pay off the balance on your home mortgage. If your mortgage value is 250,000 today, what will your payment be if your interest rate is 4.5%? Assume monthly compounding. You are offered \$2,500 5 years from now in exchange for \$1,000 today. What annual rate of return would you earn if you take this offer? Assume annual compounding....
View Full Document

## This note was uploaded on 12/29/2011 for the course FINANCE 35 taught by Professor Xdfg during the Spring '11 term at Abraham Baldwin Agricultural College.

### Page1 / 3

Critical anaylsis. Financial Functions - year for 20 years,...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online