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?© BrainMass Inc. brainmass.com March 22, 2019, 12:31 am ad1c9bdddf
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.