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f. A security has a cost of $1,000 and will return $2,000 after 5 years. What rate of return does the security provide? Inputs PV=FV=N=PMT=

image text in transcribedimage text in transcribed f. A security has a cost of $1,000 and will return $2,000 after 5 years. What rate of return does the security provide? Inputs PV=FV=N=PMT= Outputs Use Excel RATE Function: Note: Use zero for Pmt since there are no periodic payments. Note that the PV is given a negative sign because it is an outflow (cost to buy the security). g. Suppose you invested $30,000, and it is expected to grow by 8% per year. How long would it take for the invesment to double? Inputs Inputs: PV=FV=IYR=growthratePMT= Outputs =Yearstodouble. Use Excel NPER Function: h. Find the PV of an ordinary annuity that pays $1,000 at the end of each of the next 5 years if the interest rate is 15%. Inputs: PMT=FV=N=I/YR= PV: Use function wizard (PV) PV= i. How would the PV and FV of the above annuity change if it were an annuity due rather than an ordinary annuity? Inputs: PMT=FV=N=V/YR= i. How would the PV and FV of the above annuity change if it were an annuity due rather than an ordinary annuity? Inputs: PMT=FV=N=L/YR= PV: Use function wizard (PV) PV= j. Find the PV of an investment that makes the following end-of-year payments. The interest rate is 8%. Rate=8% To find the PV, use the NPV function: PV=

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