Calculating Present Values and Growing Annuity Perpetuity
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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.
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Solution Summary
The solutions provides details on how to calculate present value of growing annuity and growing perpetuity.
Education
- BE, Bangalore University, India
- MS, University of Wisconsin-Madison
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