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a. Find the FV of $1,000 invested to earn 10% annually 5 years from now. Answer this question by using a math formula and also
a. Find the FV of $1,000 invested to earn 10% annually 5 years from now. Answer this question by using a math formula and also by using the Excel function, fx. Inputs PV=I/YR=N=PMT= Outputs Use Formula: FV=PV(1+I)N= Use Excel FV Function: b. What would the FV for part (a) be if the interest rate were 10% with semiannual compounding rather than 10% with annual compounding? Inputs PV=IYYR=N=PMT= Outputs Use Formula: FV=PV(1+I)N= Use Excel FV Function: c. Use information in part (a) to create a table that shows the FV at 0%,5%, and 20% for 0,1,2,3,4, and 5 years. Then create a graph with years on the horizontal axis and FV on the vertical axis to display your results. d. Find the PV of $1,000 due in 5 years if the discount rate is 10% per year. Again, work the problem with a formula and also by using the function wizard. Inputs FV=I/YR=N=PMT= Outputs Formula: PV=FV/(1+I)NN= Use Excel PV Function: e. What would the PV for part (d) be if the interest rate were 10% with semiannual compounding rather than 10% with annual compounding? Inputs FV=I/YR=N=PMT= Outputs Formula: PV=FV/(1+I)N= Use Excel PV Function
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