fx * ***** ******* IM 117 10 ******* 140 N=1, r=08, PMT 1000 to be received end of ye 1.2.3. Compute the PV of the money you are willing to pay 14 ************** 114 HP 140 ME HE ******* EEEEEE 190 1 IN HE 14 M 146 w 140 IN HO 19 HP www TH 4:11 G PRESENTANT Problem 6.1. Multiple Payments: Compounding interest-Annuity-Present Value P You will receive $1,000 per year beginning one year from now for a period of 3three years at an 8 percent inte How much will you be willing to pay now for this stream of cash flow? 3 1 12 6.2. Practice Problem--Annuity-Compute Present Value number rate of interest) of periodi -Your 3 PMT (Payments) 1000 1000 1000 PMT (Payments) 1000 6.1. Compute Problem--Annuity-Compute Present Value (number rerate of interest) of period) (present 1000 0.03 0.06 Practice Problem 7.1. ENDING ANNUAL A PAYMENTS it is necessary in many instances to determine the periodic equal payments required for an annuity For example, you like to accumulate $10,000 at the end of 5 (five) years from now by making equal annual pa if you can investata compound 6% (Sie percent) interest rate, what will be the amount of each of your annual p Answer 15000 12000 7.2. Practice Problem-Annuity-Payments tv (fuate value) rate of interest) 0.03 0.06 0.04 16000 13000 12000 Sheet1 0.05 0.05 0:04 7.3. Comure Problem-Annuilty-Payments fv (fumare value) rate of interest) 006 0.04 0.03 9 5 Sheet2 nimmber of period) pe present val) 10 9 nimber of period) -You 10 9 * PMT (Pm) ANSWER PMT (Paymen) ANSWER Sheet3 + II fx " 14 94 W W ******* M ***323******* 118 HE 192 The 118 118 SEGES 124 us ******* 114 115 THE HE in 19 140 ME 140 HE TA 14 ******* G 4:11 * Compute Problem 4.4 n (number of periods) fvtfuture valse) 2 B 13 1 $1,000 $1.000 $1,000 1 3 FUTURE VAUVANNUITY Problem 5.1. Annuity-Multiple Payments-Compounding interest-Aeruity-Future VID You deposit 50 now $1,000 at the end of year 1, $1,000 at the end of year 2, and $1,000 at the end of y How much you will receive at the end of 3 (three years N-3, 08, PMT-1000 end of yr 1, at the end of year 2-1000 end of yr 3. Compute the F ANSWER -1000 -1000 --10:00 Problem 5.2.: Multiale Pments-Compounding interest-Annuity-Compute fatare al 10 PMT (Payments) PMT (Payments) Sheet1 r(interest rate) -1000 -1000 0.09 0.05 0.04 Problem 5.3.Annat Multiale Prements Compounding Interest-anta-Gamese fature future valu ANSWER PMT (Payment) rinite of interest) 1000 1000 1000 0.01 0.06 rate of interest) pv (present value) 0.03 006 0.08 -755.14 -737.258 -720.481 ANNUITY-MULTIPLE PAYMENTS MADE OR RECEIVED PRESENT VALUE (PV) ANNUITY Problem 6.1. Multiple Payments-Compounding Interest-Annalty-Present Value (PV) You will receive $3,000 per year beginning one year from now for a period of three years at an How much will you be willing to pay now for this stream of cash flow? N-3;r 08, PMT 3000 to be received end of yr 1,2,3 Compute the PV of the money you are willing to Answer 0.01 0.06 005 Compute number of periods aber e ponads- Yer Sheet2 nusber of period future valu ANSWER 6.2. Practice Problem-Annuity-Compute Present Valge rate of interest) number of period) Your (number of period Yor 6.3. Compte Problem-Annuity-Compute Present Value Cumber PMT Sheet3 pr (present impo * fx W M M M H 16 " ST 34 " w St AL A M M W 11 34 15 3. T N 1 W ar M M M ********* " ********* ****** 107 G 4:11 Practice Problem 3.1-r(interest rate) Problem 3.1. Finding interest Rate Assume that the present value of an investment is $1,000, the future value is $1,403, the time per N-5, pv-$1,000, fv $1,403, what is r? Ar Practice Problem 3.2-r(interest rate) 1 2 [3 L 2 3 Compute Problem 3.3-r(interest rate) ww $1.000 $1,000 $1,000 L 2 $1,000 $1,000 $1,000 L 2 3 tr(future value) of period)-Your Practice Problem 4.3-n (number of periods) $1,000 $1.000 $1.000 3 7 fv (future vala) ember of persod-Yor $1,000 $1,000 $1,000 Practice Problem 4,1- Practice Problem 4.2, Finding number of period Assume that the present value of an investment is -$1,000, the future value is $1,403, the interes 07, pv-$1,000, fv $1,403, what is n (number of period) Compute Problem 4.4-n (number of periods) interest rate) 0.00 0.06 6:05 Solving for interest Rate (interest rate) 0.09 0.01 0.04 PO -766.14 -747.758 710641 -766.14 -347,258 -710.681 pv (present -766.14 -747.258 -710.681 Compute interest Rate Solving fornumber of period pviprosent value) A CONTI JESSHEE -755.14 -737.258 -720681 Compute interest Rate JANSWERS Compute number of periods (number of periods- ANSWEET Compute number of periods of period)-Year ANSWER ANNUITY MULTIPLE PAYMENTS MADE OR RECEIVED FUTURE VAN Prem 5.1. Mtiale Parments Compounding interest-Annuity-Patare 100 You deposit 50 now $1,000 at the end of year 1, $1,000 at the end of year 2, and 51,000 at the end of y How much you will receive at the end of 3 (three years? Sheet1 Sheet2 Sheet3 +