# Time value of money, Accounting class

*label*Business Finance

*timer*Asked: Nov 27th, 2017

*account_balance_wallet*$15

### Question Description

Time value of money problem

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## Tutor Answer

The solution is attached.Please, let me know if you need further explanation.

King's College

Fall 2017

ACCT115L

Lab Project 08: Using Time Value of Money Functions in Excel

TVM-1:

Determine the amount that would accumulate for the following investment:

$10,050 invested at the start of a year, at 10% per annum, compounded annually for 6 years.

Solve using the Present and Future Value Tables found at the end of the textbook or those

separately provided by the instructor (see Moodle). Hint: This is a future value calculation.

Use Table:

Future Value of $1.

Factor:

Multiply

1.77156

$

10,050

X

1.77156

=

$

17,804

=

$

17,804

Solve using appropriate function in Excel:

Use FV:

($17,804)

X

-1

TVM-2:

Determine the amount that would accumulate for the following investment:

$650 invested at the start of a year, at 12% per annum, compounded quarterly for 10 years.

Solve using the Present and Future Value Tables found at the end of the textbook or those

separately provided by the instructor (see Moodle). Hints: This is a future value calculation. Also,

because it involves quarterly compounding, divide the annual percent by 4 and multiply the

periods times 4 because the tables are designed for annual increments.

Use Table:

Future Value of $1.

Factor:

Multiply

3.26304

$

650

X

3.26304

=

$

2,121

=

$

2,120

Solve using appropriate function in Excel:

Use FV:

($2,120)

X

-1

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