Instructions:

Use this EXCEL link: https://1drv.ms/x/s!Ag6WjAqSgm6igURkQloP8bJx_Q4h

Part 1: Please explore the following videos to learn more about time value before completing this assignment:

Excel Basic Time Value of Money Functions:https://www.youtube.com/watch?v=TDpuYH7d7Nc This basic YouTube video shows how to use Excel to calculate the present and future values of a lump sum. The video also shows the calculations for rate and number of periods, which we do not cover.

Present Value of an Ordinary Annuity: https://www.youtube.com/watch?v=Np_bAu8vOQg This video shows how to use Excel to calculate the present value of an annuity.

Future Value of an Ordinary Annuity: https://www.youtube.com/watch?v=KTe5G7HmJl8 This video shows how to use Excel to calculate the future value of an annuity.

Part 2: Next, please upload Assignment 2 as an Excel file

• See Assignment 2 - Time Value of Money [doc] document for the instructions regarding the Study Problems you will need to complete.

Assignment #2

Chapter 5

Use this EXCEL link: https://1drv.ms/x/s!Ag6WjAqSgm6igURkQloP8bJx_Q4h

Answer the following problems in an Excel file. Please upload only one Excel file with all of your answers, including #3 (which requires an explanation rather than a calculation). All problems must be solved using the PV, FV, PMT functions in Excel. I should be able to see your formulas in the "bar" at the top of your spreadsheet.

PV & FV & PMT

• If I deposit $16,000 in a bank account that pays interest of 6%, compounded annually, how much will I have in the account after 10 years?
• If I deposit $16,000 in a bank account that pays simple interest of 6%, how much will I have in the account after 10 years?
• How would you explain the difference in the answers to the previous two problems, given that both banks pay interest at the same rate? Be specific.
• You need to have $22,500 to pay for your wedding in 3 years. How much do you need to deposit today in a bank that pays 4% interest, compounded annually, in order to achieve your goal?
• You invested $25,000 8 years ago at 5.5% annual interest rate. If you invest an additional $1,500 a year, for 12 years at the same 5.5% annual rate, how much will you have 12 years from now?
• In 20 years you would like to have $280,000, you only have $47,000 currently. If your rate of return is 8.5%, will you reach your goal?
• What is the accumulated sum of $68 a year for the next 6 years compounded annually at 8%?
• What is the present value of $34 a year for 4 years discounted back to the present at 3%?
• Everett purchased a truck for $37,500, putting down 10%. He has agreed to pay the remaining balance over the next 7 years in 7 equal end-of-year payments, plus 4% compound interest on the unpaid balance. What will the equal payments be?

Use this EXCEL link: https://1drv.ms/x/s!Ag6WjAqSgm6igURkQloP8bJx_Q4h