Question

Note: The data for these exercises can be found on the Benninga, Principles of Finance with Excel, Third Edition companion website (www.oup.com/us/Benninga). 1. (FV single cash flow) You just put $600 in the bank, and you intend to leave it there for 10 years. If the bank pays you 15% interest per year, how much will you have at the end of 10 years? 2. (FV single cash flow, finding r) Five years ago you made a deposit of $50. The value of this deposit today is $70.13. What was the annual return earned on the deposit? a. Use the template in this problem to arrive at the answer with trial and error. b. In Section 2.1, we show that the accumulation grows by a factor of (1+r)". Solve the problem again by solving 70.13 = 50*(1+r). 3. (Savings plans) You plan to open a savings account by depositing $1,000 in the bank today. You also plan to deposit $1,000 in the bank in 1 year, 2 years, ..., 9 years. If the bank pays interest of 3% per year, how much will you have in the bank 10 years from now? 4. (FV annuity) Your parents have just opened a savings account for you. They plan to make monthly deposits of $200 for the next 10 years (120 deposits) where the first deposit starts today. Assume that the account earns 0.5% inter- est per month. What will be the value of your saving account after 10 years?

please help with number 3! show work with excel

Answer 1

Please find below the solution..

Interest rate	3%
year	Deposit	Future value in year 10
0	0	-	=B4*(1+$B$1)^(9-A4)
1	1000	1,266.77
2	1000	1,229.87
3	1000	1,194.05
4	1000	1,159.27
5	1000	1,125.51
6	1000	1,092.73
7	1000	1,060.90
8	1000	1,030.00
9	1000	1,000.00
Total using (summing C4:C13)	10,159.11
using FV function		$10,159.11