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w2 Lecture Solving Tvm Problems in Excel

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10/16/2015

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# 1VM Lxamp|es SLL 1P8LL S1LÞS ln LxCLL ƹƽ SLep Cneť

Cllck on ƍfxƍ buLLonŴ see LoolbarŴ b
luLure value of a Slngle AmounL
ueposlL \$100 LodayŴ whaL wlll be Lhe value ln 3 years?
MeLhod 1ť Algebralc
Þv 100
ÞL8lCuS 3
ƹ100*1Ŧ1Ɗ3
lv 133Ŧ1
MeLhod 2ť use Lxcel lx formula AL dlfferenL raLes of lnLeresLť
Þv 100 100 100 100 100 100 100 100 100
ÞL8lCuS 1 2 3 3 3 3 3 3 3
8 0Ŧ1 0Ŧ1 0Ŧ1 0Ŧ08 0Ŧ09 0Ŧ1 0Ŧ11 0Ŧ12 0Ŧ13
ÞM1 0 0 0 0 0 0 0 0 0
8LC/Lnu 0 0 0 0 0 0 0 0 0
lv (\$110Ŧ00) (\$121Ŧ00) (\$133Ŧ10) (\$123Ŧ97) (\$129Ŧ30) (\$133Ŧ10) (\$136Ŧ76) (\$140Ŧ49) ####
luLure value of an AnnulLy (Crdlnary AnnulLy) luLure value of an AnnulLy (AnnulL
ueposlL \$100 aL Lhe Lnu of each year for Lhree yearsŴ whaL wlll be Lhe value ln 3 years? ueposlL \$100 aL Lhe 8LClnnlnC of
MeLhod 2ť use Lxcel lx formula ueposlL 1 ueposlL 2 ueposlL 3 MeLhod 2ť use Lxcel lx formula
Þv 0 100 100 100 Þv 0
ÞL8lCuS 3 2 1 0 ÞL8lCuS 3
8 0Ŧ1 0Ŧ1 0Ŧ1 0Ŧ1 8 0Ŧ1
ÞM1 Ŵ100 0 0 0 ÞM1 Ŵ100
8LC/Lnu 0 0 0 0 8LC/Lnu 1
lv \$331Ŧ00 (\$121Ŧ00) (\$110Ŧ00) (\$100Ŧ00) (\$331Ŧ00) lv \$364Ŧ10
ÞresenL value of a Slngle AmounL ÞresenL value of a Slngl
Þay \$100 aL Lhe end of Lhree yearsŴ whaL amounL musL Lhe lnvesLor deposlL Loday Lo accumulaLe \$100 aL Lhe end of Lhree years? Þay \$300 aL Lhe end of L
MeLhod 2ť use Lxcel lx formula MeLhod 2ť use Lxcel lx
lv Ŵ100 lv Ŵ300
ÞL8lCuS 3 ÞL8lCuS 3
8 0Ŧ1 8 0Ŧ1
ÞM1 0 ÞM1 0
8LC/Lnu 0 8LC/Lnu 0
Algebralc
Þv \$73Ŧ13 73Ŧ13148 Þv \$373Ŧ66
ÞresenL value of an AnnulLy
?ou wanL Lo reLlre LodayŦ ?ou wanL Lo recelve an lncome of \$3ţ000 per year for 20 yearsŦ WhaL amounL wlll you need Lo fund Loday Lo fund Lhls annulLy?
MeLhod 2ť use Lxcel lx formula
lv 0
ÞL8lCuS 20
8 0Ŧ1
ÞM1 3000
8LC/Lnu 0
Þv (\$42ţ367Ŧ82)
uneven Cash llows
?ou lnvesL \$30 LodayŦ ?ou recelve back ln lncome Lhe followlng cash flows aL Lhe Lnu of each yearŦ
?ear 1 30 ?ear 0 ?ear 1 ?ear 2 ?ear 3
?ear 2 73 Ŵ30 30 73 100
?ear 3 100 Ŵ30 43Ŧ3 62Ŧ0 73Ŧ1
WhaL ls Lhe value of Lhls lnvesLmenL?
8aLe ls 10Ʒ 132Ŧ37 \$
1lme Lo uouble lnvesLmenLs
?ou lnvesL \$1 Lodayţ raLe ls 20Ʒţ when wlll you have \$2 accumulaLed?
Þv Ŵ1
lv 2
raLe 0Ŧ2
pmL 0
beg/end 0
n 3Ŧ80
Solvlng for 8aLe
?ou lnvesL \$1 Lodayţ you have \$2 ln Lhree yearsţ whaL ls Lhe raLe LhaL you are earnlng?
Þv Ŵ1
lv 2
n 3
ÞM1 0
8LC/Lnu 0
8A1L 26Ŧ0Ʒ
AmorLlzaLlon 1able
ConsLrucL an amorLlzaLlon Lable for a \$1ţ000ţ 3 yearţ 10Ʒ equal annual paymenL loanŦ
SLep Cneť Solve for annual paymenL
lv 0
ÞL8lCuS 3
Þv 1000
8A1L 0Ŧ1
8LC/Lnu 0
ÞM1 (\$402Ŧ11)
SLep 1woť ConsLrucL Lable
8eg 8al pmL r prln eb
1ţ000Ŧ00 \$ (402Ŧ11) \$ (100Ŧ00) \$ (302Ŧ11) \$ 697Ŧ89 \$
697Ŧ89 \$ (402Ŧ11) \$ (69Ŧ79) \$ (332Ŧ32) \$ 363Ŧ37 \$
363Ŧ37 \$ (402Ŧ11) \$ (36Ŧ36) \$ (363Ŧ33) \$ 0Ŧ02 \$
SLep 1woť SLep 1hree
under ƍCr selecL a caLegoryƍ Cllck ln each cellţ and Lhen Lake arr
selecL ƍllnanclalƍ on cell wlLh daLa Lo reference lnpu
1hen scroll down and selecL funcLlon you are solvlng forţ elLher ƍÞvƍţ ƍlvƍ ƍ8aLeƍ or ƍÞM1ƍ
Ƽƹ fx buLLon
ueposlL 1 ueposlL 2 ueposlL 3
100 100 100
3 2 1
0Ŧ1 0Ŧ1 0Ŧ1
0 0 0
0 0 0
(\$133Ŧ10) (\$121Ŧ00) (\$110Ŧ00) (\$364Ŧ10)

  ½° .

@  \$-  I    ½¾  ½¾  ½¾                % % % % % % % %  If f°°°%°°  ½¾f  --- .   D¾ n ¯f I  9    9.@  \$-  9I %  % D°  °.   D¾ n  I  9    9.@  \$-  9I    fn   9 ¾ °If f° 9ff  °  .@  \$-  9I   9 ¾ °If f°°° f°   f f° n  f°°n¯  ½  f f¾ Jff¯°° °  f° ¾f°°" .@  \$-  I   9 ¾ °If f° ¯° 9ff  °   f¾ ff¯°¯¾ ° ¾ ½¾ ffnn¯f f  °   f¾" .   D¾ n ¯f I  9    9.   D¾ n ¯f 9I  9    9.n°   ° ¾  f               °f ¾°  ¾                                    % % % % % % % % % % % % % % % %   If f°°°% °f°°%  ½¾f - fn f  f¾ f  f ° f¾" .   D¾ n ¯f 9I  9    9.

f¾¾ ° ¾ f  n   fn°°n¯  °nf¾¾f - fn f  f   f  f  f  f  f       f         Jf¾ f ¾° ¾¯ °" f ¾   @¯   ° ¾¯ °¾ ° ¾ f f ¾  °f fnn¯f " 9I I f ½¯ \$ ° °        .

°f ° ¾ f f °  f¾ f¾ f ff  f°°" 9I I ° 9.@ \$- @        ¯f°@f  .

@ % %  ½@ .°¾nf°f¯f°f  f   f   ff°°f½f¯ °f°  ½°  f°°f½f¯ ° I  9  9I  @  \$-  9.

°¾nf   f ½¯  ½°     % % % % % %        % % % % % %        % % % % % %   .

@  ½@ . ½@ D°  ¾  nfnf  ¾  n °f°nf @ °¾n °f° ¾  n°n°f ¾°    9I  I  f  9.

n° fnn  f°  °f f °n  ff   °n °½  °  ½¾  ½¾  ½¾                % % % % % % % % .

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