FINC $4390$ TVM $1$ Practice

$1.$ Calculate the present value of $$1,000$ to be received at the end of $5$ years. Assume an interest rate of $7\%.$

$2.$ Tommy Harris is considering an investment that pays $6\mathrm{.}5\%$ annually. How much must he invest today such that he will

have $$25,000$ in $7$ years? $($round to the nearest dollar$)$

$3.$ Ray has $$5,000$ to invest in a small business venture. His partner has promised to pay him back $$8,200$ in $5$ years. What is

the return earned on this investment?

$4.$ You decide to begin saving towards the purchase of a new car in $5$ years. If you put $$1,000$ at the end of each of the next

$5$ years in a savings account paying $6\%$ compounded annually, how much will you accumulate after $5$ years?

$5.$ Wes would like to buy a condo in Florida in six years. He is looking to invest $$75,000$ today in a stock that is expected to

earn a return of $18\mathrm{.}3\%$ annually. How much will he have at the end of six years? $($round to nearest dollar$)$

$6.$ You need to have $$15,000$ in five years to pay off a home equity loan. You can invest in an account that pays $5\mathrm{.}75\%$

compounded quarterly. How much will you have to invest today to attain your target in five years?

$7.$ You are interested in investing $$10,000,$ a gift from your grandparents, for the next four years in a mutual fund that will

earn an annual return of $8\%.$ What will your investment be worth at the end of four years?

$8.$ Joan Alexander wants to go on a long and luxurious vacation in three years. She could earn $8\mathrm{.}20\%$ compounded monthly

in an account if she were to deposit the money today. She needs to have $$10,000$ in three years. How much will she

have to deposit today?

$9.$ Ryan Holmes wants to deposit $$4,500$ in a bank account that pays $8\mathrm{.}25\%$ annually. How many years will it take for his

investment to grow to $$10,000?($ROUND TO THE NEAREST YEAR$)$

$10.$ Calculate the total interest, simple interest, and compound interest earned on a $7-$year investment of $$600$ at a $5\%$

annual rate of interest.

Please use three $-$ tiered spreadsheet to provide appropriate solutions to problems.

Calculate the total interest, simple interest, and compound interest earned on a $3-$year investment of $$500$ at a

$7\%$ annual rate of interest.

Now, match those values to an Excel spreadsheet. To achieve this, create a dynamic, three$-$tiered spreadsheet

$($designed like the image below$)$ which calculates the total, simple, and compound interest in each of the first

three years. Ensure that the only "hard$-$wired" values are the Original Loan Amount and the Rate of Interest

$($highlighted in yellow$).$ All other values within the spreadsheet should be the result of an equation.