33 32 Part 4 I need $1,000,000 in 20 years if I am going to retire (Fat Chancell) I currently have $100,000 saved for my retirement (I wish!!). A slick Wallstreet investment expert with the last name of Madoff has convinced me to invest my $100,000 in savings in his mutual fund program. His fund has projected annual returns of 11%. How much will need to contribute annually to meet my investment objectives at this projected rate of return? 34 35 Present Value (PV) 36 Future Value (FV) = 37 Payment (PMT) = 38 Payments or periods per yr (P/YR) = 39 Annual Interest Rate (RATE) = 40 Number of periods (NPER) = 41 Part 5 A company is going to issue debt in the form of bonds. The bonds will pay $50 every 6 months to the bond investor. The bonds have a 10 year term and when the bonds mature, the issuing company will pay $1,000 for each bond. The annual yield (underlying interest rate on the bond) is 11% How much can the issuing company sell these bonds for today? Present Value (PV) 45 Future Value (FV)= Payment (PMT) 47 Payments or periods per yr (P/YR) Annual Interest Rate (RATE) = Number of periods (NPER) 50 42 43 44 46 48 49 51 52 53 54 55