FIN 419 Week 2 Questions

Time Value of Money Calculations

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?