You have ₹10,000 to invest.

You will need the money in 5 years and you expect to earn 8% per year. How much w

What are you looking for?

Use the FV formula:

FV(rate,nper,pmt,pv)

Compute

(Notice that the spreadsheet has the same sign convention as the calculators with positive inflows and negative ou
placed before the FV formula to make the result positive.)
ect to earn 8% per year. How much will you have in 5 years.

PV = 10,000

NPER = 5

RATE = 8% (Same as .08)

FV = ₹ 14,693.28

with positive inflows and negative outflows. A negative sign was

ke the result positive.)
You need ₹1500,000 in 18 years for your daughter's education. If you can earn 6% per year, how much do you nee
today?

What are you looking for? FV =

NPER =

Use the PV formula: RATE =

PV(rate,nper,pmt,fv)

Compute PV =
% per year, how much do you need to invest

1,500,000

18

6% (Same as .06)

₹ 525,515.69
You have ₹30,000 to invest and you need ₹45,000 for a down payment and closing costs on a house. If you want t

What are you looking for?

Use the RATE formula: RATE(nper,pmt,pv,fv)

(Note that the rate will display as a whole percent, you need to format the cell to see the decimal places.)
nd you need ₹45,000 for a down payment and closing costs on a house. If you want to buy the house in 2 years, what rate of in

PV =
FV =
(nper,pmt,pv,fv) NPER =

Compute RATE =

as a whole percent, you need to format the cell to see the decimal places.)
o buy the house in 2 years, what rate of interest do you need to earn?

30,000
45,000
2

22.47%
You have ₹15,000 to invest right now and you figure you will need ₹25,000 to buy a new car. If you can earn 9%
buy the car?

What are you looking for? PV =

FV =
Use the NPER formula: RATE =
NPER(rate,pmt,pv,fv)
Compute NPER =
ew car. If you can earn 9% per year, how long before you can

15,000 50000
25,000 500000
9% 12% (Same as .09)

5.927585048655 20.3177605630598 years

How much will ₹5,000 to be received in 10 years be worth today if the interest rate is 7%?
PV = FV /(1+i)n
PV= 5000
i=7%=0.07

2541.75
Calculation
(=5000/POWER(1.07,10))
Time Value on Excel (Using the Financial Function (fx) Wizard)
Future Value: =FV()
If I deposit 100 into an account earning 10% per year, how much will my deposit be
worth after 5 years?

PV : ₹ -100.00
I: 10.00%
n: 5
FV? ₹ 161.05
What if we had the same problem but interest is compounded monthly?

PV : ₹ -100.00
I: 0.83%
n: 60
FV? ₹ 164.53
*** Note: Change values in 'PV' 'I' and 'n' to solve for FV
Time Value on Excel (Using the Financial Function (fx) Wizard)
Present Value: =PV()
How much would I need to deposit today in an account earning 10% per year in order
to accumulate $10,000 after 5 years?

FV : ₹ -10,000.00
I: 10.00%
n: 5
PV? ₹ 6,209.21
What if my interest was compounded monthly?

FV : ₹ -10,000.00
I: 0.83%
n: 60
PV? ₹ 6,077.89
*** Note: Change values in 'FV' 'I' and 'n' to solve for PV
Time Value on Excel (Using the Financial Function (fx) Wizard)
Future Value of an Annuity: =FV()

How much would I have in my retirement account if I deposited 2000 each year for 35 years and I earned 10%
my savings? What about 4,000?

PMT : ₹ -2,000.00 PMT : ₹ -4,000.00

I: 10.00% I: 10.00%
n: 35 n: 35
FVA? ₹ 542,048.74 FVA?
Instead, what if I made monthly deposits of 166.67? How about monthly deposits of 333.33?

PMT : ₹ -166.67 PMT : ₹ -333.33

I: 0.83% I: 0.83%
n: 420 n: 420
FVA? ₹ 632,785.66 FVA?
*** Note: Change values in 'PMT' 'I' and 'n' to solve for FVA
years and I earned 10% on

₹ 1,084,097.47
3.33?

₹ 1,238,851.38
Time Value on Excel (Using the Financial Function (fx) Wizard)
Future Value of an Annuity Due: =FV()

How much would I have in my retirement account if I deposited 2000 at the beginning of each year for 35 year
I earned 10% on my savings? What about 4,000?

PMT : ₹ -2,000.00 PMT : ₹ -4,000.00

I: 10.00% I: 10.00%
n: 35 n: 35
FVA? ₹ 542,048.74 FVA?
FVAD? ₹ 596,253.61 FVAD?
Instead, what if I made beginning of the month deposits of $166.67? How about monthly deposits of $333.33?

PMT : ₹ -166.67 PMT : ₹ -333.33

I: 0.83% I: 0.83%
n: 420 n: 420
FVA? ₹ 632,785.66 FVA?
FVAD? ₹ 638,058.88 FVAD?
*** Note: Change values in 'PMT' 'I' and 'n' to solve for FVA
f each year for 35 years and

$ 1,084,097.47
$ 1,192,507.22
ly deposits of $333.33?

₹ 1,238,851.38
₹ 1,249,089.82
Time Value on Excel (Using the Financial Function (fx) Wizard)
Present Value of an Annuity: =PV()

How much could I afford to borrow for a home if I can make annual payments of 12,000 per year for 30 years
8%? What about monthly payment of 1,0000?

PMT : ₹ -12,000.00 PMT : ₹ -10,000.00

I: 8.00% I: 0.67%
n: 30 n: 360
PVA? ₹ 135,093.40 PVA?

What if I wanted to know what my montlhy payments would be a 500000 car loan over five years at 8%?

PMT : ₹ -500,000.00
I: 0.67%
n: 60
PVA? ₹ 10,138.20
*** Note: Change values in 'PMT' 'I' and 'n' to solve for PVA
0 per year for 30 years at

₹ 1,362,834.94

ve years at 8%?
Time Value on Excel (Using the Financial Function (fx) Wizard)
Present Value of an Annuity Due: =PV()

How much could I afford to borrow for a home if I can make annual payments of 12,000 per year for 30 years
8%? What about monthly payment of 1,0000?

PMT : ₹ -12,000.00 PMT : ₹ -10,000.00

I: 8.00% I: 0.67%
n: 30 n: 360
PVA? ₹ 135,093.40 PVA?
PVAD? ₹ 145,900.87 PVAD?

What if I wanted to know what my montlhy payments would be a 500000 car loan over five years at 8%?

PMT : ₹ -500,000.00
I: 0.67%
n: 60
PVA? ₹ 10,138.20
PVAD? ₹ 10,071.06
*** Note: Change values in 'PMT' 'I' and 'n' to solve for PVA
0 per year for 30 years at

₹ 1,362,834.94
₹ 1,371,920.51

five years at 8%?

Time Value on Excel (Using the Financial Function (fx) Wizard)
Unequal Cash Flows:

a) Present Value
How much must I deposit today to receive 100 in Year 1, 200 in Year 2,300 in Year 3,
and 400 in Year 4 if I can earn 10% on my deposits?
PVIF at
Year FV 10% PV of CFn
1 ₹ 100.00 0.90909 ₹ 90.91
2 ₹ 200.00 0.82645 ₹ 165.29
3 ₹ 300.00 0.75131 ₹ 225.39
4 ₹ 400.00 0.68301 ₹ 273.21

Present Value of Unequal Cash Flows ₹ 754.80

***Note: Change values of any variable to view changes

 b) Future Value
What will my bank account be worth if I deposit 100 in Year 1,200 in Year 2, 300 in
Year 3 and 400 in Year 4 if I can earn 10% on my deposits?
FVIF at
Year FV 10% FV of CFn
1 ₹ 100.00 1.10000 ₹ 110.00
2 ₹ 200.00 1.21000 ₹ 242.00
3 ₹ 300.00 1.33100 ₹ 399.30
4 ₹ 400.00 1.46410 ₹ 585.64

Future Value of Unequal Cash Flows ₹ 1,336.94

Capital Budgeting Project NPV
Required Return = 12%
Year CF Formula Disc CFs
0 (100,000.00) =(-165000)/(1.12)^0 = (100,000.00)
1 70,000.00 =(63120)/(1.12)^1 = 62,500.00
2 60,000.00 =(70800)/(1.12)^2 = 47,831.63
3 20,000.00 =(91080)/(1.12)^3 = 14,235.60
24,567.24

EXCEL =NPV(D2,B5:B7) 124,567.24

NPV + CF0 24,567.24
EXCEL =IRR(B4,B7) 28.70%
 IRR
Year CF
0 (100,000.00)
1 70,000.00
2 60,000.00
3 20,000.00

EXCEL =IRR(B3:B6) 28.70%

Non-conventional Cash Flows

I= 15%
YR CF
0 ₹ -90,000.00
1 ₹ 132,000.00
2 ₹ 100,000.00
3 ₹ -150,000.00
NPV ₹ 1,769.54 >0
IRR-1 10.11% < 15%
IRR-2 42.66% > 15%
MIRR
R= 20%
Yr CF
0 -60
1 155
2 -100

Method 1: Discounting Approach

R= 20%
Yr CF ADJ MCF
0 -60 -69.44 -129.44
1 155 155
2 -100 0
IRR= 19.74%

Method 2: Reinvestment Approach

R= 20%
Yr CF ADJ MCF
0 -60 -60
1 155 0
2 -100 186 86 MIRR
IRR= 19.72%

Method 3: Combination Approach

R= 20%
Yr CF ADJ MCF
0 -60 -69.4444 -129.444444
1 155 0
2 -100 186 186
IRR= 19.87%

Excel: 19.87%
19.87%
PI vs NPV

A B
CF(0) (10,000.00) (100,000.00)
PV(CIF) 15,000.00 125,000.00
PI 1.50 1.25
NPV 5,000.00 25,000.00