Question

Please show the work in excel be sure to use appropriate formulas to solve each exercise...

Please show the work in excel be sure to use appropriate formulas to solve each exercise or problem.

A1 If you deposit $12,000 in a bank account that pays 10% interest annually, how much will be in your account after 7 years?

A2.    What is the present value of a security that will pay $10,000 in 20 years at an interest rate of 8%?

A3.                 Find the future value of the following ordinary annuities:

$600 per year for 10 years at 10%

$300 per year for 5 years at 5%

$600 per year for 5 years at 0%

    A 4 Find the present value of the following ordinary annuities:

$600 per year for 10 years at 10%

$300 per year for 5 years at 5%

$600 per year for 5 years at 0%

Homework Answers

Answer #1

A1)Future Value of Deposit = Deposit*(1 + r)^n = 12,000 x (1 + 10%)^7 = $23,384.60

N=No of periods

R= rate of interest per period

A2)Present Value of Security= Future value / (1 + r)^n = 10,000 / (1 + 8%)^20 = $2,145.48

A3) Future Value of Ordinary Annuity

Formula Amount=P(1+r)n-1 / r

a. N = 10, PMT = 600, r = 10%, PV =

Future Value =600(1+.10)10-1/0.1= $9,562.45

b. N = 5, PMT = 300, r = 5%, Future Value =300(1+.05)5-1/0.05= $1,657.69

c. N = 5, PMT = 600, r = 0%, Future Value =600*5= $3,000.00

A4) Present Value of ordinary Annuity

a. N = 10, PMT = 600, r = 10%,Present Value=600*6.14456 = $3,686.74

b. N = 5, PMT = 300, r = 5%, Present Value=300*4.32947= $1298.84

c. N = 5, PMT = 600, r= 0%, Present Value=600*5= $3,000.00

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