Question

) What is the future value at the end of year 13 of a series of...

) What is the future value at the end of year 13 of a series of deposits that starts at $6,000 in year 1 and shrinks by 7% per year for 13 years (last deposit occurs at the end of year 13)? The annual interest rate is 7% compounded annually.

please answer in excel

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Answer #1

Solution(s):

ANSWER:

All the calculations have been done in excel.

i = 7%

YEAR 0 1 2 3 4 5 6 7 8 9 10 11 12 13
CASH FLOWS 6,000 5580 5189.4 4826.142 4488.31206 4174.130216 3881.941101 3610.205224 3357.490858 3122.466498 2903.893843 2700.621274 2511.577785
FUTURE VALUE $13,513.15 $11,745.07 $10,208.34 $8,872.67 $7,711.76 $6,702.74 $5,825.75 $5,063.50 $4,400.99 $3,825.16 $3,324.67 $2,889.66 $2,511.58
TOTAL FUTURE VALUE $86,595.02

in excel we calculate future value by using the =-fv function.

=-fv(rate,nper,pmt,pv,type)

the total future value is $86,595.02

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