Question

5. Complete the table below that calculates the Future Value of $10,000 invested at 7% per year using periods from 1 to 10 years. The table also illustrates the value today of $10,000 to be received in the future from 1 to 10 years later using a discount rate of 5%. (Note: table is to be completed by appropriately copying the Excel formulas. Using Excel copy/paste functionality it should take just a few seconds to do it).

Number of	Number of	Number of	Number of	Number of	Number of
Periods	(Excel Formula)	(Algebra Formula)		(Excel Formula)	(Algebra Formula)
1	$10,700.00	$10,700.00		$9,523.81	$9,523.81
2	$11,449.00	$11,449.00			$9,070.29
3
4
5
6
7
8
9
10				$6,139.13	$6,139.13

Answer 1

No.of Pds.	(Excel Formula)		(Algebra Formula)		No.of Pds.	(Excel Formula)		(Algebra Formula)
1	FV(7%,1,,10000)=	10700	10000*(1+0.07)^1=	10700	1	PV(5%,10,,10000)=	$6,139.13	10000/1.05^10=	6139.13
2	FV(7%,2,,10000)=	11449	10000*(1+0.07)^2=	11449	2	PV(5%,9,,10000)=	$6,446.09	10000/1.05^9=	6446.09
3	FV(7%,3,,10000)=	12250.43	10000*(1+0.07)^3=	12250.43	3	PV(5%,8,,10000)=	$6,768.39	10000/1.05^8=	6768.39
4	FV(7%,4,,10000)=	13107.96	10000*(1+0.07)^4=	13107.96	4	PV(5%,7,,10000)=	$7,106.81	10000/1.05^7=	7106.81
5	FV(7%,5,,10000)=	14025.52	10000*(1+0.07)^5=	14025.52	5	PV(6%,6,,10000)=	$7,049.61	10000/1.06^6=	7049.61
6	FV(7%,6,,10000)=	15007.30	10000*(1+0.07)^6=	15007.30	6	PV(5%,5,,10000)=	$7,835.26	10000/1.05^5=	7835.26
7	FV(7%,7,,10000)=	16057.81	10000*(1+0.07)^7=	16057.81	7	PV(5%,4,,10000)=	$8,227.02	10000/1.05^5=	8227.02
8	FV(7%,8,,10000)=	17181.86	10000*(1+0.07)^8=	17181.86	8	PV(5%,3,,10000)=	$8,638.38	10000/1.05^3=	8638.38
9	FV(7%,9,,10000)=	18384.59	10000*(1+0.07)^9=	18384.59	9	PV(5%,2,,10000)=	$9,070.29	10000/1.05^2=	9070.29
10	FV(7%,10,,10000)=	19671.51	10000*(1+0.07)^10=	19671.51	10	PV(5%,1,,10000)=	$9,523.81	10000/1.05^1=	9523.81

Note: While using EXCEL function, you add NEGATIVE sign to the current investment ,( ie. -10000 ), so that the final answer comes out POSITIVE-- as the intial investment is a cash outflow.

EXCEL Nos.	C	D	E	F	G	H	I	J	K
	No.of Pds.	(Excel Formula)		(Algebra Formula)		(Excel Formula)		(Algebra Formula)
35	1	FV($D$49,C35,0,-$E$49,0)=	10700	$E$49*(1 + $D$49)^C35=	10700	PV($G$49,C35,0,-$H$49,0)=	9523.81	PV($G$49,C35,0,-$H$49,0)=	9523.81
36	2	FV($D$49,C36,0,-$E$49,0)=	11449	$E$49*(1 + $D$49)^C36=	11449	PV($G$49,C36,0,-$H$49,0)=	9070.29	PV($G$49,C36,0,-$H$49,0)=	9070.29
37	3	FV($D$49,C37,0,-$E$49,0)=	12250.43	$E$49*(1 + $D$49)^C37=	12250.43	PV($G$49,C37,0,-$H$49,0)=	8638.38	PV($G$49,C37,0,-$H$49,0)=	8638.38
38	4	FV($D$49,C38,0,-$E$49,0)=	13107.96	$E$49*(1 + $D$49)^C38=	13107.96	PV($G$49,C38,0,-$H$49,0)=	8227.02	PV($G$49,C38,0,-$H$49,0)=	8227.02
39	5	FV($D$49,C39,0,-$E$49,0)=	14025.52	$E$49*(1 + $D$49)^C39=	14025.52	PV($G$49,C39,0,-$H$49,0)=	7835.26	PV($G$49,C39,0,-$H$49,0)=	7835.26
40	6	FV($D$49,C40,0,-$E$49,0)=	15007.30	$E$49*(1 + $D$49)^C40=	15007.30	PV($G$49,C40,0,-$H$49,0)=	7462.15	PV($G$49,C40,0,-$H$49,0)=	7462.15
41	7	FV($D$49,C41,0,-$E$49,0)=	16057.81	$E$49*(1 + $D$49)^C41=	16057.81	PV($G$49,C41,0,-$H$49,0)=	7106.81	PV($G$49,C41,0,-$H$49,0)=	7106.81
42	8	FV($D$49,C42,0,-$E$49,0)=	17181.86	$E$49*(1 + $D$49)^C42=	17181.86	PV($G$49,C42,0,-$H$49,0)=	6768.39	PV($G$49,C42,0,-$H$49,0)=	6768.39
43	9	FV($D$49,C43,0,-$E$49,0)=	18384.59	$E$49*(1 + $D$49)^C43=	18384.59	PV($G$49,C43,0,-$H$49,0)=	6446.09	PV($G$49,C43,0,-$H$49,0)=	6446.09
44	10	FV($D$49,C44,0,-$E$49,0)=	19671.51	$E$49*(1 + $D$49)^C44=	19671.51	PV($G$49,C44,0,-$H$49,0)=	6139.13	PV($G$49,C44,0,-$H$49,0)=	6139.13
49		7%	10000		5%	10000