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.
... Each problem is solved by using functions in MS Excel. ... cash outflow Amount of periodic payment=PMT= 0 Interest Rate=Rate= 10% Number of periods=NPER= 5 Future ...
... You solve for the time using NPER function. You enter these three variables and get NPER. In excel, the PMT is assumed to be an "investment" and therefore ...
... enter "=rate", Excel will ask for pmt, nper, FV FV 500000 pmt=250, nper=360 months ... 1200000 value in 11 years = 120000 Period 11 yrs use formula "rate" Annual ...
... a) Present deposit in her account=PV=$12,500 Periodic deposit=PMT=500 Number of periods=NPER=12*20 ... We can use FV function in MS Excel to get this amount. ...
... 5% Bond S Number of coupon payments=NPER= 5 Coupon amount=PMT= $100 Maturity amount=FV= $1,000 Value of bond can estimated by using PV function in MS Excel. ...
... present value in the given cases with the help of functions in MS Excel... FV of bond=FV= 1000 Number of periods=nper= 8 Periodic payment=PMT= 0 Interest ...
... ve sign indicates cash outflow) Rate=8% Periodic Payment=PMT=0 No ... of Periods=Nper= 1 Future Value=FV ... Use FV function in MS Excel to get the value FV= $10,800.00 ...
... Finance - The Time Value of Money. ... We can use the excel PMT function as shown below: Interest rate, RATE 12% Number of years, NPER 4 Present value (loan amount ...
... 75000 Balance=PV=TU=$675,000 Annual with drawl=PMT=70000 Rate of interest=RATE=8% Number of periods=NPER=20 Type ... We can use FV function in MS Excel to get ...
