Chapter04

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: be 4 and the interest rate would be 4%. The future value of $116.99 will appear on the calculator display as shown in the first display at the left. For the quarterly compounding case, the number of periods would be 8 and the interest rate would be 2%. The future value of $117.17 will appear on the calculator display as shown in the second display at the left. FV Solution 117.17 Spreadsheet Use The future value of the single amount with semiannual and quarterly compounding also can be calculated as shown on the following Excel spreadsheet. CHAPTER 4 Time Value of Money 157 Comparing the calculator, table, and spreadsheet values, we can see that the calculator and spreadsheet values agree generally with the values in Table 4.7 but are more precise because the table factors have been rounded. Continuous Compounding continuous compounding Compounding of interest an infinite number of times per year at intervals of microseconds. In the extreme case, interest can be compounded continuously....
View Full Document

This document was uploaded on 03/03/2014 for the course MBA BMMF at Open University Malaysia.

Ask a homework question - tutors are online