Table use substituting pvan 25000 and pmt 4800 into

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Unformatted text preview: as a negative number in order to calculate an unknown number of periods. That approach is used here.) Using the inputs shown at the left, you will find the number of periods to be 8.15, which is consistent with the value found using Table A–4. Spreadsheet Use The number of years to pay off the loan also can be calculated as shown on the following Excel spreadsheet. 168 PART 2 Important Financial Concepts Review Questions 4–15 How can you determine the size of the equal annual end-of-period deposits necessary to accumulate a certain future sum at the end of a specified future period at a given annual interest rate? 4–16 Describe the procedure used to amortize a loan into a series of equal periodic payments. 4–17 Which present value interest factors would be used to find (a) the growth rate associated with a series of cash flows and (b) the interest rate associated with an equal-payment loan? 4–18 How can you determine the unknown number of periods when you know the present and future values—single amount or annuity—and the applicable rate of interest? S U M M A RY FOCUS ON VALUE Time value of money is an important tool that financial managers and other market participants u...
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This document was uploaded on 03/03/2014 for the course MBA BMMF at Open University Malaysia.

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