Calculating Present Values and Growing Annuity Perpetuity

I would like to have the solution to the following sample problems in EXCEL format so that I can see the formulas used. Thanks

1. What is the present value of a series of payments received each year for 9 years, starting with $300 paid one year from now and the payment growing in each subsequent year by 3%? Assume a discount rate of 5%.

Please round your answer to the nearest cent.

2. What is the present value of a series of payments received each year for 6 years, starting with $500 paid one year from now and the payment growing in each subsequent year by 5%? Assume a discount rate of 8%.

Please round your answer to the nearest cent.

3. What is the present value of a series of payments received each year forever, starting with $100 paid one year from now and the payment growing in each subsequent year by 6%? Assume a discount rate of 9%.

Please round your answer to the nearest cent.

4. What is the present value of a series of payments received each year forever, starting with $400 paid one year from now and the payment growing in each subsequent year by 9%? Assume a discount rate of 11%.

Please round your answer to the nearest cent.

Solution Summary

The solutions provides details on how to calculate present value of growing annuity and growing perpetuity.

... We have to calculate the future value given the present value. ... For a growing perpetuity the present value is calculated as PV = Amount at the end of the year ...

... For perpetuity, the present value is calculated as Present... and error, using a financial calculator or using ... rate (g), what will the present value of perpetuity...

Calculating Present and Future Value. ...Calculate the future value solutions for period, interest, and payments. ... What is the present value of a. $1,163 a year for ...

... The solution calculates price of stocks for different growth rates of ... can be read from tables or calculated using the ... Step 2: Calculate the present value of a ...

... 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 ...

... 7. Calculate the interest rate implied (approx.), where PV ... Factor Ordinary Annuity PVIFA= Present Value Interest Factor ... read from tables or calculated using the ...

... We use FV function to calculate the Future Value. ... formula SI = PRT For 89,000 to grow to 175,000 ... 8,000 Rate 9% Period 30 years Present Value $82,189.23 Nancy ...

...growing perpetuity the present value is calculated as PV ... We have to calculate the future value of the ... percent discount rate, what is the present value of this ...

... current value of the stock is the present value of all ... as of year 5. This is calculated as P5 ... First calculate the value of operations using the constant growth ...