Question

Part 2: Present Value

In this part, calculate the present values. Use the Excel PV function to compute the present values.

1. You are committed to owning a $200,000 home. If you believe your mutual fund can achieve an annual return of 10 percent, and you want to buy the home in 15 years, how much must you invest today? (7 Points)

2. Calculate the present values in the table below using the PV Excel function. (7 Points)

Future value	Years	Interest rate	Present value
$19,500	16	6%	?
$47,390	9	12%	?
$312,200	13	11%	?
$629,380	25	13%	?

Part 2:	(See https://support.office.com/en-us/article/pv-function-23879d31-0e02-4321-be01-da16e8168cbd)
C)
Rate	Nper	Pmt	FV		PV
D)
Future Value	Years	Interest Rate	Present Value
$19,500	16	6%	$7,676.10
$47,390	9	12%	$17,089.31
$312,200	13	11%	$80,395.95
$629,380	25	13%	$29,645.03

Answer 1

Present value = Future value / ( 1 + interest rate )^ no of years

Amount we must invest today = 200000 / 1.1^15 = $47,878.41

Future Vale (FV)	Years (N)	Interest rate ( I/Y)	Present Value (PV)
19500	16	6	7676.102532
47390	9	12	17089.30908
312200	13	11	80395.95057
629380	25	13	29645.02705

Please note teh above answers have been derived after using the Financial Calculator.

Once all the inouts are in place key in CPT < PV & the present values will be displayed.