Question: Example 1: Present Value for Annuity Cash Flows Finding the present value of an annuity is a simple task in Excel. Remember the Pmt argument

Example 1: Present Value for Annuity Cash Flows Finding the present value of an annuity is a simple task in Excel. Remember the Pmt argument in the PV and FV functions that we left blank in Chapter 5? The Pmt stands for the Suppose you just won the lottery. Based on the following assumptions, what is the present value of your winnings? Output Excel Function Function Annual payment: $ 100,000 Present Value PV =PV() Number of years for payme 25 Future Value FV =FV() Interest rate: 11% Number of Perio nper =nper() Interest Rate rate =rate() Present value: Payment pmt =pmt() Example 2: Future Value for Annuities We can find the future value of an annuity using the Pmt argument in the FV function. Suppose you are saving for retirement. Based on the following assumptions, how much will Annual savings: 3,000 Number of years to save: 30 Interest rate: 11% Future value: Example 3: Payment To find the annuity payment, Excel uses the PMT function. Suppose you are buying a house with the following terms: Purchase price: $ 175,000 Number of months for repayment: 240 Monthly interest rate: 0.50% Screenshot Monthly payment:Example 5: Future Value of Multiple Unequal Cash Flows Unfortunately, Excel does not have a function to calculate the future value of multiple cash flows when the cash flows are of different amounts. However, we can calculate the Cash flow $ 10,000 15,000 2,000 UI BWI 19,000 16,500 Interest rat 10% What is the future value of these cash flows? We can set up a table to find the future value of each cash flow and sum the future values. Since we want the future value at year 5, we Future value UI AWNI Total: S

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Calculate using 9 decimal places, retain the 9 decimal places throughout the calculations, then when you report answers round to 2 decimal places. Examples: If the answer is in years: i.e., 9.5576...

EXCEL ASSIGNMENT #2 . Check Figure: NPV $1,112 in favor of overhanling the old truck REQUIREMENTS: Complete the requirements for P12-28 on page 602 of your textbook Do the Total Cost Approach first...

Check Figure: NPV $1,112 in favor of overhauling the old truck REQUIREMENTS: Do the Total Cost Approach first then, do an Incremental Cost Approach analysis below your Total Cost Approach. They...

Please help with equations and cell references needed Check Figure: NPV $1,112 in favor of overhauling the old truck REOUIREMENTS: - Complete the requirements for P12-28 on page 603 of your textbook....

what is it thats missing i will resubmit later . B D E G H Enter your name in this box Tutorial 3 - Present Value of Uneven Cash Flows Find the present value of an uneven cash flow stream invested...

EXCEL ASSIGNMENT #2 Check Figure: NPV $1,112 in favor of overhauling the old truck REQUIREMENTS: Complete the requirements for P12-28 on page 602 of your textbook. Do the Total Cost Approach first...

Please note: Answer Requires -Brigham, E. F. , & Houston, J. F. (2016). Fundamentals of financial management (14th ed.). Boston, MA: Cengage Learning. Chapter 9, "Stocks and Their Valuation" (pp....

EXCEL ASSIGNMENT #2 Check Figure: NPV $1,112 in favor of overhauling the old truck REQUIREMENTS: Complete the requirements for P12-28 on page 603 of your textbook. Do the Total Cost Approach first...

Check Figure: NPV $1,112 in favor of overhauling the old truck REQUIREMENTS: Do the Total Cost Approach first then, do an Incremental Cost Approach analysis below your Total Cost Approach. They...

Figure shows a spherical hollow inside a lead sphere of radius R = 4.00 cm; the surface of the hollow passes through the center of the sphere and "touches" the right side of the sphere. The mass of...

1.7. The brightness of probably the brightest lamp so far available (PEK Labs type 107/109, excited by 100 W of electrical power) is about 95 W/cm sr in its most intense green line ( = 546 nm)....

Why might using market price as a transfer price be inappropriate when the selling division has idle capacity

Brealey Corporation is currently all equity financed and has avalue of $75 million. Investors currently require a return of 10.3percent on common stock. Brealey has a marginal tax rate of 15percent 2...