Find the future value one year from now of a $7,000 investment at a 3 percent annual compound interest rate. Also calculate the future value if the investment is made for two years.

FV one year
FV two years
Sum of FV's

Find the future value of $10,000 invested now after five years if the annual interest rate is 8 percent.

a. What would be the future value if the interest rate is a simple interest rate?

FV using simple interest

b. What would be the future value if the interest rate is a compound interest rate?

FV using compound interest

Find the present value of $7,000 to be received one year from now assuming a 3 percent annual discount interest rate. Also calculate the present value if the $7,000 is received after two years.

PV received one year from now
PV received two years from now

Determine the present value now of an investment of $3,000 made one year from now and an additional $3,000 made two years from now if the annual discount rate is 4 percent.

PV one year from now
PV two years from now

Use a financial calculator or computer software program to answer the following questions.

a. What is the present value of $359,000 that is to be received at the end of twenty-three years, the discount rate is 11 percent, and semiannual discounting occurs?

PV w/ semi-annual discounting

b. How would your answer for (a) change if monthly discounting were used?

PV w/ monthly discounting

Solution Summary

This solution illustrates how to use Excel functions to find future and present values.

Calculating Present and Future Value and Loan Amortizations. ... of a detailed explanation to calculate present and future... savings or retirement calculator (see http ...

... refer to a type of interest calculation in which interest earnings are calculated not only on ... For calculating the future value, we either calculate or read ...

... results in $127.63, exactly what was calculated using the ... is to use the tables to calculate future amounts ... Another example of calculating the future value of an ...

... above data, calculate the future value in each case. (Using the formula and also a financial calculator). 4 Future Value Years Interest Rate Present Value $349 ...

...Calculating for IRR is a trial and error procedure. ... it is easier to use financial calculator to compute IRR ... of a detailed explanation to calculate the present...

Calculating the Number of Periods. Trying to solve for the unknown number of years. Present Value Years Interest Rate Future Value $ 560 8% $ 1,284 810 9 4,341 ...

... Maturity (Year) Interest Rates (%) 1 12.00% 2 11.75 3 11.25 4 10.00 5 9.25 a. Calculate the forward ... This is calculated using a financial calculator, the time ...

... 1 Annuity due type= PV=R/i*(1-1/(1+i)^n)*(1+i)=10000 Use PV function to get present value of annutity ($28,080.18) PV=. 21 25. Calculate the future value of ...

... (When calculating DCF on a ... Payback cannot be calculated if the positive cash inflows do not eventually ... FINAL COMMENTS Calculate and compare across companies. ...