Time Value of Money II Worksheet Solve the following You want to be a millionaire in 25 years If you can earn 10 on your investments, how much do you have to save each year to hit that $1,000,000 mark Table Amy is 65 and has $350,000 in her retirement account An actuary has determined that if her investments earn 7 , she can withdraw $32,300 annually How many more years does the actuary expect Amy to live Table Karla sued her landlord 5 years ago for damage to her things from a water leak and won a judgement against him The original award was $15,500, but she finally received $18,858, which included interest What is the rate of interest she received Table Use EXCEL to determine the following Ty bought a new car for $25,000 He put $2,000 down and financed the rest with the dealer who had a special offer of 2 interest for 60 monthly payments How much will Ty pay each month EXCEL function used Inputs Result Twins Taylor and Tanner both received $1,000 from their grandmother for their birthday She told them they had to save it for 5 years Taylor found an account paying 4 5 with monthly compounding Tanner elected an account paying 5 with annual compounding Who will have more at the end of the five years EXCEL template used Inputs Results Piper has $300,000 for her retirement She is considering investing in a 20 year, 7 annuity and is trying to determine whether she should take the payments quarterly or monthly Under which method would she get the most money each year EXCEL function Input Results Twins Kate and Allie will be going to college in 15 years Their parents have decided that Dad will start a savings fund for Kate He will deposit $2,000 into an account the first of each year That account earns 7 and interest is compounded annually Their mother will also deposit $2,000 into an account for Allie, but she is going to make those deposits at the end of each quarter and the account pays 7 5 compounded quarterly Who will have more in her college fund EXCEL function Input Results

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Time Value of Money II - Worksheet Solve the following: You want to be a millionaire in 25 years. If you can earn 10% on

Time Value of Money II - Worksheet

Solve the following:

You want to be a millionaire in 25 years. If you can earn 10% on your investments, how much do you have to save each year to hit that $1,000,000 mark?

Table______________________

Amy is 65 and has $350,000 in her retirement account. An actuary has determined that if her investments earn 7%, she can withdraw $32,300 annually. How many more years does the actuary expect Amy to live?

Table______________________

Karla sued her landlord 5 years ago for damage to her things from a water leak and won a judgement against him. The original award was $15,500, but she finally received $18,858, which included interest. What is the rate of interest she received?

Table_____________________

Use EXCEL to determine the following:

Ty bought a new car for $25,000. He put $2,000 down and financed the rest with the dealer who had a special offer of 2% interest for 60 monthly payments. How much will Ty pay each month?

EXCEL function used:

Inputs:

Result:

Twins Taylor and Tanner both received $1,000 from their grandmother for their birthday. She told them they had to save it for 5 years. Taylor found an account paying 4.5% with monthly compounding. Tanner elected an account paying 5% with annual compounding. Who will have more at the end of the five years?

EXCEL template used:

Inputs:

Results:

Piper has $300,000 for her retirement. She is considering investing in a 20-year, 7% annuity and is trying to determine whether she should take the payments quarterly or monthly. Under which method would she get the most money each year?

EXCEL function:

Input:

Results:

Twins Kate and Allie will be going to college in 15 years. Their parents have decided that Dad will start a savings fund for Kate. He will deposit $2,000 into an account the first of each year. That account earns 7% and interest is compounded annually. Their mother will also deposit $2,000 into an account for Allie, but she is going to make those deposits at the end of each quarter and the account pays 7.5% compounded quarterly. Who will have more in her college fund?

EXCEL function:

Input:

Results: