Homework Answers
2a: The goal seek in excel gives the following result – 5.004626%. This can be rounded to 5.005% (3 decimal) or 5.00% (2 decimals)
| Period | Amount | 1+r | PV |
| 1 | 200.00 | 1.05005 | 190.4677989 |
| 2 | 200.00 | 181.3899122 | |
| 3 | 200.00 | 172.7446866 | |
| 4 | 200.00 | 164.5115012 | |
| 5 | 200.00 | 156.6707177 | |
| 6 | 200.00 | 149.2036338 | |
| 7 | 200.00 | 142.0924386 | |
| 8 | 200.00 | 135.3201701 | |
| 9 | 200.00 | 128.8706748 | |
| 10 | 200.00 | 122.7285689 | |
| Total | 1,544.00 |
2b: The formula for rate function in excel will be: RATE (10, 200, -1544, 0). This will give a value of 5.00463%
3a:
| Period | Amount | 1+r | PVIF | PV |
| 1 | 21 | 1.08 | 0.9259 | 19.44 |
| 2 | 34 | 0.8573 | 29.15 | |
| 3 | 40 | 0.7938 | 31.75 | |
| 4 | 33 | 0.7350 | 24.26 | |
| 5 | 17 | 0.6806 | 11.57 | |
| Total | 116.17 |
3b: No, the annuity formula cannot be used as the amount is different each year and there is no growth rate involved here as well.
3c: The built in function also cannot be used as the amounts are not constant and are varying each year. The excel built in formula of PV works in case of PMT i.e. when payments are constant.
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MODULE IV: TIME VALUE OF MONEY INTRODUCTION The time value of money analysis has many a lysis has many applications, ranging from setting hedules for paying off loans to decisions about whether to invest in a partie financial instrument. First, let's define the following notations: I = the interest rate per period Na the total number of payment periods in an annuity PMT = the annuity payment made each period PV = present value...
This homework question requires that you complete the Excel file entitled "HW#2 Template Spring2019.xlsx found on Courseweb. Once you have completed it, print it and attach it to your homework submission with the first six questons. You just won a prize of S5,000 at the local talent show. You can receive the money all up front (t-0), or get a series of monthly or weekly payments as described below. In all cases, your discount rate is 5% APR (annual percentage...
Not sure what other info you need? This is the whole question.
There is no other info to give you.
Lou Lewis, the president of Lewisville Company, has asked you to give him an analysis of the best use of a warehouse the company owns. a. Lewisville Company is currently leasing the warehouse to another company for $6,800 per month on a year-to-year basis. (Hint: Use the PV function in Excel to calculate, on an after-tax basis, the PV of...
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