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PMT and NPER functions in Excel - Time value of money

At each question the solution cell must contain the Excel formula (Function) that produced the answer. - Replace the existing numerical contents.- Also add a brief explanation of how the answer was derived and the significance of the question in understanding the Time Value of Money.

1. Alan had saved up $500,000. How much more must he save each year over the next 20 years in order to have a
total of $1 million? Alan earns 5% interest, compounded annually.
Answer: $9,878.71

Hint: Use the Excel PMT function.

2. You deposit $5,000 in an account that pays 8% interest per annum. How long will it take to double your money?
Answer: 9 years
Hint: Use the Excel NPER function.
Use the Rule of 72.

Solution Preview

See the attached file. Thanks

Time Value of Money
At each question the solution cell must contain the Excel formula (Function) that produced the answer.  - Replace the existing numerical contents.-  Also add a brief explanation of how the answer was derived and the significance of the question  in understanding the Time Value of Money.

1. Alan had saved up $500,000. How much more must he save each year over the next 20 ...

Solution Summary

Solves two problems on time value of money using Excel formula (function) with brief explanation.

$2.19