Please complete in excel1. Future ValuesUsing the Excel FV function, calculate the future values with annual compounding:Present valueYearsInterest rateFuture value $ 3,150 613% 8,453 197% 89,305 139% 227,382 215%2. Future ValuesIf you save and invest $200 a month for the next 10 years for your 8-year old child, how much money would you have in your child’s 529 plan in 10 years if the plan’s average return is 9% p.a.? What if you can invest $300 a month?3. Present ValuesUsing the Excel PV function, calculate the present value in each of the following:Present valueYearsInterest rateFuture value 154% $ 17,328 89% 41,517 1312% 790,382 2511% 647,8164. Present ValuesYour father wants to give you some money and he lets you to choose one among the three following payments:A. $100,000 todayB. $10,000 at the beginning of each year (starting today) for the next 15 yearsC. $150,000 five years laterWhich method would you prefer if your opportunity cost of money is 8% p.a.?5. Interest RatesUsing the Excel RATE function, calculate the interest rate in each of the following:Present valueYearsInterest rateFuture value $ 715 9 $ 1,381 905 6 1,718 15,000 21 141,832 70,300 18 312,8156. Interest RatesYour friend is kind enough to lend you $30,000 today so that you can start a small business. She is giving you three payment plan choices. Which payment plan is the most favorable to you?A. Pay back a lump sum amount of $50,000 in 5 years.B. Pay back $10,000 a year for the next 4 years, with the first payment starting 1 year from today.C. Pay back $1,000 a month for the next 4 years, with the first payment starting 1 month from today.7. Number of PeriodsUsing the Excel NPER function, find the number of periods in each of the following:Present valueYearsInterest rateFuture value $ 1959% $ 1,105 2,1057% 3,700 47,80012% 387,120 38,65019% 198,2128. Number of PeriodsYou want to retire when you accumulate $2,000,000 in your 401(k) account that returns 10% p.a. on average. If your current 401(k) balance is $250,000 and you want to invest $500 a month, when can you retire (in number of months)? How about investing $700 a month?9. Fixed Periodic PaymentsUsing the Excel PMT function, calculate the monthly payments for each of the following:Present valueMonthsInterest rateFuture valuePMT – 240.5% $ 10,000 40,000 600.5% – 200,000 2400.375% – 200,000 3600.40% – 10. Periodic PaymentsYou are shopping for a car and got quotes for the same kind of car on financing terms from three different South Florida dealers. All quote the same price of $30,000 with no down payment.Dealer A. 0.9% financing for 60 months;Dealer B. 1.9% for 72 monthsDealer C. 0.0% for 36 months(1) Which deal will have the least amount of monthly payment?(2) Also, which deal is the best for you, financially speaking?(3) Why do you think that is the best option for you?
Recent Comments