Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Instructions: Using Financial Formulas in Excel, answer the following time value of money problems in a single Excel worksheet. You can round to the nearest
Instructions: Using Financial Formulas in Excel, answer the following time value of money problems in a single Excel worksheet. You can round to the nearest dollar. You must turn in your answers in an Excel document. Answer as much as possible.
- What is the balance in an account at the end of 9 years if $7,500 is deposited today and the account earns 2% interest compounded annually?
- How much interest is earned in an account by the end of 5 years if $32,000 is deposited and interest is 3.5% per year, compounded semi-annually?
- If you wish to accumulate $40,000 in 6 years, how much must you deposit today in an account that pays annual interest rate of 3%, with semi-annual compounding of interest?
- If you deposit 5,000 per year for 5 years in an account that pays an annual interest rate of 2%, what will your account be worth at the end of 5 years?
- You decide that you need $70,000 in 6 years in order to make a down payment on a house. You plan to make annual deposits to achieve your goal. If interest rate is 4%, how much should be deposited each time? Hint use the Financial Function PMT to solve for the payment and PV will be zero.
- You owe $26,000 to your parents for funding some of your college. You promise to make 8 annual payments of $4,000 to settle your debt. Approximately what interest rate are your parents charging (estimated up to 2 decimal places), if you make the 8 annual payments beginning one year from now? Hint use the Financial Function RATE. Note if you need help use the Help on this function feature. This help will include an example for you to follow.
- You are offered an investment that will pay $12,000 per year for 15 years. If you feel that the appropriate discount rate is 6%, what is the investment worth to you today?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started