Question: If we receive 5 000 eight years from now how

If we receive $ 5,000, eight years from now, how much is that equivalent to today, if we believe that we can earn 5 percent on other opportunities? See earlier NOTE regarding requirements for Exercises.
A. Solve using a spreadsheet program such as Excel. Indicate the spreadsheet formula showing numeric values rather than cell references. For example, for the value that $ 100 today could grow to in two years, assuming 10 percent annual compounding, the spreadsheet solution formula would be: FV(10%, 2, 0, 100). Note that since there is no annuity payment (PMT) in this problem, it is necessary to show the blank between two commas or a zero after the number of periods. In addition, answer the questions using formulas with cell references.
B. Solve using a financial calculator. This is optional.

  • CreatedDecember 19, 2014
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