Question: Excel does not have a function for the sum of the future values for a set of uneven payments. Therefore, we must find this FV
| Excel does not have a function for the sum of the future values for a set of uneven payments. Therefore, | ||||||||
| we must find this FV by some other method. Probably the easiest procedure is to simply compound each | ||||||||
| payment, then sum them, as is done below. Note that since the payments are received at the end of each | ||||||||
| year, the first payment is compounded for 2 years, the second for 1 year, and the third for 0 years. | ||||||||
| Year | Payment | x | (1 + I )^(N t) | = | FV | |||
| 1 | 100 | 1.1664 | 116.64 | |||||
| 2 | 200 | 1.0800 | 216.00 | |||||
| 3 | 400 | 1.0000 | 400.00 | |||||
| Sum of FV's = | 732.64 | You just need to sum, I've calculated compounding factors and FVs for you above | ||||||
| An alternative procedure for finding the FV would be to find the PV of the series using the NPV function, then compound that amount for 3 years at 8%, as is done below: | ||||||||
| PV =???? | ||||||||
| FV of PV =????? | ||||||||
| Using Excel formulas/Wizard | ||||||||
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