Answer To: Excel file included
Shakeel answered on Oct 08 2021
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A couple of notes regarding this assignment:
1. The due date of this assignment is October 8th, by 5 pm.
2. You only need to submit this Excel workbook, nothing else.
3. Submit your assignment via the eClass portal.
4. Name your assignment file as: AREC433633_Assignment1_YourName
5. In addition to mathematical calculations and function applications, please also pay attention to readability and clarity. Format cells/colums/graphs appropriately; add comments as needed.
Question1
Question 1. Answer the following short questions using Excel (either the Excel built-in functions, or math formulas, or both). (30 points in total, 3 points each)
Note: to help you get started, I highted the cells need your inputs.
a. Find the FV of $5,000 invested to earn 8% after 5 years. Answer this question by using a math formula and also by using the Excel function.
Inputs: PV = 5000
r = 8%
T = 5
Math formula PV*(1+r)^T
Excel function $7,346.64
b. Now create a table that shows the FV at 0%, 5%, and 20% for 0, 1, 2, 3, 4, and 5 years. Then create a graph with years on the horizontal axis and FV on the vertical axis to display your results.
Interest rate
Year 0% 5% 10% 20%
0 $5,000.00 $5,000.00 $5,000.00 $5,000.00
1 $5,000.00 $5,250.00 $5,500.00 $6,000.00
2 $5,000.00 $5,512.50 $6,050.00 $7,200.00
3 $5,000.00 $5,788.13 $6,655.00 $8,640.00
4 $5,000.00 $6,077.53 $7,320.50 $10,368.00
5 $5,000.00 $6,381.41 $8,052.55 $12,441.60
c. Find the PV of $5,000 due in 5 years if the discount rate is 8%. Again, work the problem with a formula and also by using the function.
Inputs: FV = 5000
r = 8%
T = 5
Math formula: FV/(1+r)T
Excel function $3,402.92
d. A security has a cost of $5,000 and will return $10,000 after 5 years. What rate of return does the security provide?
Inputs: PV = 5000
FV = 10000
r = 15%
T = 5
Excel function (FV/PV)^(1/T)-1
e. Find the PV of an annuity that pays $8,000 at the end of each of the next 5 years if the interest rate is 12%. Then find the FV of that same annuity.
Inputs: PMT = $ 8,000
T = 5
r = 12%
Excel function PV = $28,838.21
Excel function FV = $50,822.78
f. How would the PV and FV of the...