Question #1 - Future Value Calculations: Financial function that you will need: FV: Future value of an investment based on an initial investment and/or periodic constant payments, and a constant interest rate. FV can be used to calculate the future value of an annuity or the future value of a lump sum amount. FV(rate,nper,pmt,type) . # B # . Rate - interest rate for each period nper- number of payment/interest compounding periods Pmt - payment made each period (e.g. amount of the annuity) PV - present value of lump sum in today's dollars (e.g. a down payment for a house, etc.). If PV is omitted, it is assumed to be zero. Type - 0: payment at end of period, 1: payment at beginning of period. If type is omitted, it is assumed to be zero. Q1. Calculate the future value of each following pattern of cash flows: a) You deposit $12,500 today into a 10 year term deposit. The investment pays a 6.5% annual interest rate, compounding quarterly. How much does the term deposit pay you upon maturity? b) You deposit $8,750 today in a 5 year term certificate of deposit. The term deposit pays an 8.25% annual interest rate, compounding monthly. How much does the term deposit pay you upon maturity? c) You sign up for a Canada Savings Bond payroll deduction plan. Your employer deducts $200 at the beginning of each month from your wages. The CSB pays 4.0% annual interest, compounding monthly, which is added to the principal of your CSB. How much will your investment be worth in 7 years? d) You plan to retire in 15 years. To help save for retirement, you deposit $75,000 today into an RRSP mutual fund and your bank transfers $300 at the end of each month to the mutual fund. The mutual fund is expected to yield 8% compounding monthly. How much will your investment be worth in 15 years? e) You plan to invest $15,000 for 9 years in a term deposit, which pays back principal and interest on maturity. You are reviewing two investment alternatives. Circle the option which will give you the best return on investment. 1)-7.5% annual interest rate, compounding annually 2). 7.3% annual interest rate, compounding monthly

or this fulure valien of a bine sum amount. PViratenper,pintitroe) - Rase - kiterest rate for each period - nper - rumber of pegrnendinterest corrpounding percods IfPV in omitind, t is assimed to be roro. thatumed to be trite. Q1. Calculate the future value of each folleweng pattam of cash flows: antion? 2) 73N annui riderest rute, compounsing monaly Instructions: Use the appropriate functions to answer the following questions. Put each question after the previous one, leaving at least blank row in between. Set up a table of constants for each question. You will need to create places for all of the necessary data in that table of constants, including the number of compounding periods per year. Use the same table of constants for all parts of each question. Instead of using numbers in formulas, use the cell references that contain these numbers. It might be useful to check your answers using your calculator. For example, what is the future value of $12,500 to be repaid at the end of 10 years, with a 6.5% annual interest rate compounding quarterly. The answer is a future value of $23,819.48. Format your answers using comma, 2 decimal places for the dollar amounts and percent to 2 decimal places for interest rates