Purchase Solution

PV and FV of Single Sum, Annuity and Perpetuity

Not what you're looking for?

Ask Custom Question

1. Present value of single sum problem

You are going to be given $100,000 in 12 years. Assuming an inflation rate of 3.5%, what is the present value of this amount?

2. Perpetuity problem

What is the value of a perpetuity with an annual payment of $100 and a discount rate of 6%?

3. Future value of single sum problem

You put $2,000 in an investment account today which will earn 8% over the next 14 years, what is the future value?

4. Present value of single sum problem

You are going to be given $45,000 in 7 years. Assuming an inflation rate of 2.5%, what is the present value of this amount?

5. Present value of annuity problem

You will receive $1,200 at the end of the next 15 years, assuming an 8% discount rate, what is the present value of the cash flows?

Purchase this Solution
Solution Summary

This solution illustrates how to solve numerous time value of money problems using Excel functions. It also explains each function and how to translate a problem into each function.

Purchase this Solution
Free BrainMass Quizzes
Operations Management

This quiz tests a student's knowledge about Operations Management

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

View More Free Quizzes
Related BrainMass Solutions

  • Multiple Choice

    a. annuity b. perpetuity c. growth perpetuity d. assets with single cash flow The cash flow will come when the land is sold and so it has a single cash flow 6. An annuity due is an annuity in which the first payment occur immediately.

  • Multiple Choice - Time Value of Money

    Here we have to find the future value of annuity. The amount is $800, period is 30 years and the rate is 10%. Using the FV of annuity formula FV = PMT [(1+i)^n)-1]/i FV = 800[(1+10%)^30)-1]/10% FV = $131,595 5.

  • Excel accounting formulas

    =FV(rate,nper,pmt,PV,type)  Present Value The value of a sum of money today (PV) given a sum of money in the future (FV) discounted at a per period rate of 'k' for 'n' (nper) periods.

  • Calculating Present and Future Value of Annuities

    Solutions to these problems explain the methodology to calculate PV & FV of annuities and rate of interest.

  • Time Value of Money Problems

    Solution: Problem : 1 Present Value =PV=$25000 r=rate of return=8% n=time period=10 years FV=PV*(1+r/100)^n=25000*(1+8/100)^10=$53973.12 Problem : 2 PV=$2400 FV=2*2400=$4800 n=4 years We know that FV=PV*(1+r/100)^n 4800

  • Annuities, present values, future values

    Show (with a time line, for example) that the perpetuity in 4.3a. is exactly the same as the sum of the annuities and perpetuities in 4.3b. to 4.3d. b. Show that their present values add up to the same amount. 4.5 a.

  • Implementing the TVM Concepts

    Present value of ordinary annuity is given by PV=R/i*(1-1/(1+i)^n) 1995=R/1%*(1-1/(1+1%)^12) 1995=11.25508R R=1995/11.25508=$177.25 7. Future Value of annuity=FV=$1,000,000 Annual deposit=R=?

  • Increasing Time Value of Money

    X FVIF (6%,8) = 20,000 X 1.5938 = $31,876.96 We use the PVIF table to find the PV of a single sum 1.

  • Time Value of Money

    We first find the PV in year 15 and then again discount to now PV in year 15 = 200 X PVIFA (5,12%) = 200 X 3.6048 = 720.96 Now this is a lump sum which we can discount to get the PV today PV today = 720.96/(1+12%)^15 = 131.72 Total PV = 681.09+131.72

  • Time Value of Money Concepts

    Future value (FV) of single cash flow is given by FV=PV*(1+i)^n where PV=Present Value of deposit =$33000 i=Rate of interest =7% n=number of periods=7 FV=?

View More Related Solutions