Violet deposits $3,450 at the beginning of each year into a bank account that pays 3% interest. At the end of 5 years, how much does she have in this account? Cash Flow Diagram t=0 n Time Value of Money (TVM) Framework c" compounding PV PMT FV type CPT n number of time periods ./interest rate PV present value or the amount at time t=0 PMT" annuity value FV future value or the amount at the end or final time period type "ordinary annuity" PMT at beginning of each period vs "annuity due" = PMT at end of each period CPT the value that is computed What Excel function and arguments to that function would you use to compute this value? function rate.nper, pmt. [PV], [type] What is the compounding factor that would be used to compute the growth of the principal after one year? |