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Directions: Using the financial functions of Excel, the Excel wizard and/or the formulas for TVM, solve each of the problems. Example A: You have $300,000
Directions: Using the financial functions of Excel, the Excel wizard and/or the formulas for TVM, solve each of the problems. | ||||||
Example A: You have $300,000 that you want to invest in a one year Certificate of Deposit (CD) with a 4% annual interest rate. What will be the value of that CD in a year? | ||||||
PV = | $3,00,000.00 | |||||
I/YR = | 4% | |||||
N = | 1 | |||||
Formula: | FV = PV(1+I)^N = | $3,12,000.00 | ||||
Wizard (FV): | $3,12,000.00 | |||||
Excel Function: | $3,12,000.00 | |||||
Example B: What if the investment made above were held in a CD for 5 years, with the same principle and interest rate? | ||||||
PV = | $3,00,000.00 | |||||
I/YR = | 4% | |||||
N = | 5 | |||||
Formula: | FV = PV(1+I)^N = | $3,64,995.87 | ||||
Wizard (FV): | $3,64,995.87 | |||||
Excel Function: | $3,64,995.87 | |||||
Example C: For this scenario, lets assume that CDs are being offered for 5 years at a rate of 3%, 4% and 5%. Using the table function of Excel, create a table that shows the FV at 3%, 4% and 5% for 0, 1, 2, 3, 4, and 5 years. |
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