Time Value of Money Calculations

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Gevcyr0mreb

Business Finance

Description

Purpose of Assignment

The purpose of this assignment is to allow the students to understand and practice the measurement of present value, future value, and interest rate using Microsoft® Excel®.

Assignment Steps

Resources: Microsoft® Office® 2013 Accessibility Tutorials, Microsoft® Excel®, Time Value of Money Calculations Template

Calculate the following time value of money problems using Microsoft® Excel®:

  1. If we place $8,592.00 in a savings account paying 7.5 percent interest compounded annually, how much will our account accrue to in 9.5 years?
  2. What is the present value of $992 to be received in 13.5 years from today if our discount rate is 3.5 percent?
  3. If you bought a stock for $45 dollars and could sell it fifteen years later for three times what you originally paid. What was your return on owning this stock?
  4. Suppose you bought a house for $3,250,000 to make it a nursing home in the future. But you have not committed to the project and will decide in nine years whether to go forward with it or sell off the house. If real estate values increase annually at 1.5%, how much can you expect to sell the house for in nine years if you choose not to proceed with the nursing home project?
  5. If your daughter wants to earn $215,000 within the next twenty-three years and the salaries grow at 4.45% per year. What salary should she start to reach her goal?

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Time Value of Money Calculations Grading Guide FIN/419 Version 6 Finance for Decision Making Copyright Copyright © 2017, 2016, 2015, 2010 by University of Phoenix. All rights reserved. University of Phoenix® is a registered trademark of Apollo Group, Inc. in the United States and/or other countries. Microsoft®, Windows®, and Windows NT® are registered trademarks of Microsoft Corporation in the United States and/or other countries. All other company and product names are trademarks or registered trademarks of their respective companies. Use of these marks is not intended to imply endorsement, sponsorship, or affiliation. Time Value of Money Calculations Grading Guide FIN/419 Version 6 Edited in accordance with University of Phoenix® editorial standards and practices. 2 Time Value of Money Calculations Grading Guide FIN/419 Version 6 Individual Assignment: Time Value of Money Calculations Purpose of Assignment The purpose of this assignment is to allow the students to understand and practice the measurement of present value, future value, and interest rate using Microsoft® Office®. Resources Required Microsoft® Office® 2013 Accessibility Tutorials, Microsoft® Excel® Grading Guide Content The student calculated the time value of money problems using Microsoft® Excel®: The student answered the following questions to complete the assignment: 1. If we place $8,592.00 in a savings account paying 7.5 percent interest compounded annually, how much will our account accrue to in 9.5 years? 2. What is the present value of $992 to be received in 13.5 years from today if our discount rate is 3.5 percent? 3. If you bought a stock for $45 dollars and could sell it fifteen years later for three times what you originally paid. What was your return on owning this stock? 4. Suppose you bought a house for $3,250,000 to make it a nursing home in the future. But you have not committed to the project and will decide in nine years whether to go forward with it or sell off the house. If real estate values increase annually at 1.5%, how much can you expect to sell the house for in nine years if it chooses not to proceed with the nursing home project? Met Partially Met Not Met Comments: 3 Time Value of Money Calculations Grading Guide FIN/419 Version 6 Content Met Partially Met Not Met Total Available Total Earned 5 #/5 Partially Met Not Met Total Available Total Earned 3 #/3 8 #/8 Comments: 5. If your daughter wants to earn $215,000 within the next twenty-three years and the salaries grow at 4.45% per year. What salary should she start to reach her goal? Writing Guidelines Met The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements. Intellectual property is recognized with in-text citations and a reference page. Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper. Sentences are complete, clear, and concise. Rules of grammar and usage are followed including spelling and punctuation. Assignment Total Additional comments: # Comments: 4 Instructions 1. You have five problems - one on each tab of this Excel file. 2. Please show your work in the cells. Use Excel formulas instead of writing the values/answers directly in the cell. The instructor will then know where you made a mistake and provide you valuable feedback and partial credit (if 3. It is recommended to watch the assigned videos in week # 2. Total Points: 8 e feedback and partial credit (if appropriate). If we place $8,592.00 in a savings account paying 7.5 percent interest compounded annually, how much will our acco FV = PV × (1 + i)n Present Value (PV) Interest Rate (i) Number of years (n) 8592 0.075 9.5 Answer- Refer to the Solved Example 2 on Page 49 of your text. how much will our account accrue to in 9.5 years? What is the present value of $992 to be received in 13.5 years from today if our discount rate is 3.5 percent? Future Value (FV) Interest Rate (i) Number of years (n) 992 0.035 13.5 Answer- Refer to the Solved Example 5 on Page 52 of your text. is 3.5 percent? If you bought a stock for $45 dollars and could sell it fifteen years later for three times what you originally paid. Wha Future Value (FV) Present Value (PV) Number of years (n) 135 45 15 Answer- Refer to the Solved Example 6 on Page 53 of your text. ou originally paid. What was your return on owning this stock? Suppose you bought a house for $3,250,000 to make it a nursing home in the future. But you have not committed to t If real estate values increase annually at 1.5%, how much can you expect to sell the house for in nine years if it choos FV = PV × (1 + i)n Present Value (PV) Interest Rate (i) Number of years (n) 3250000 0.015 9 Answer- Refer to the Solved Example 2 on Page 49 of your text. have not committed to the project and will decide in nine years whether to go forward with it or sell off the house. ell off the house. If your daughter wants to earn $215,000 within the next twenty-three years and the salaries grow at 4.45% per year. W Future Value (FV) Interest Rate (i) Number of years (n) 215000 0.0445 23 Answer- Refer to the Solved Example 5 on Page 52 of your text. ow at 4.45% per year. What salary should she start to reach her goal?
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Explanation & Answer

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Instructions
1. You have five problems - one on each tab of this Excel file.
2. Please show your work in the cells. Use Excel formulas instead of writing the values/answers directly in the cell.
The instructor will then know where you made a mistake and provide you valuable feedback and partial credit (if
3. It is recommended to watch the assigned videos in week # 2.
Total Points: 8

e feedback and partial cred...


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