Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need all work and formulas shown 1. Annuities and the time value of money: a. Today is 1/1/2022. Jessica wants to determine, using Excel, how

Need all work and formulas shown
image text in transcribed
1. Annuities and the time value of money: a. Today is 1/1/2022. Jessica wants to determine, using Excel, how much money she will have in 30 years (on 1/1/2052). She plans on investing $2,500 on 1/1/2023 continuing until the last deposit is made on 1/1/2052. Assume that all money in the account will earn a 5.00% annual effective interest rate each year. Using Excel, create a schedule showing the beginning amount each year, the deposit, the interest earned each year and the ending balance. Start on 1/1/2022 and project until 1/1/2052. Format all dollar amounts with O decimals using commas and $. b. Show how to compute the ending amount using the financial calculator keys. In other words, put in the N, IY, PV, PMT and FV like you would on a test into cells in Excel. Hint: When determining N, you will have to start front 1/1/2022 since the first payment of an annuity is at the end of the first year. Put the values you have answered into your calculator to make sure the results are the same as in part a. c. Jessica wants to know how much she would need to deposit into the account every year (instead of $2,500) so she will have exactly $100,000 on 1/1/2052. Compute the amount needed using the EPMT function in Excel. d. Show how to compute the new deposit amount using the financial calculator keys. In other words, put in the N, IY, PV, PMT and FV like you would on a test into cells in Excel. Make sure the answer in the calculator equals what shows in Excel. e. Copy the work in part a. to another part of the spreadsheet and REFERENCE the deposit amount computed in part c for the regular deposits. Make sure that the value at 1/1/2052 in this part of the spreadsheet is $100,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Production And Operations Analysis

Authors: Steven Nahmias

6th Edition

0073377856, 9780073377858

More Books

Students also viewed these Finance questions

Question

6. Explain the strengths of a dialectical approach.

Answered: 1 week ago