Finance 305, FALL 2012 HW No.

2 Page 1

Annuity
Inputs Payments Discount Rate / Period Number of Periods Present Value

Present Value
$140.00

Annuity
$120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0 1 2 Period 3 4 5 Present Value of Each Cash Flow Cash Flows

$ 80.00 6.0% 5 $ 336.99

8 6 5 6

Annuity Present Value using a Time Line Period Cash Flows Present Value of Each Cash Flow Present Value Annuity of Present Value using the Formula Present Value

0 1 2 3 4 5 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 75.47 $ 71.20 $ 67.17 $ 63.37 $ 59.78 $ 336.99

$ 336.99

Annuity of Present Value using the PV Function Present Value $ 336.99

Finance 305, FALL 2012 HW No. 2 Page 2

Annuity
Inputs Payments Discount Rate / Period Number of Periods

Future Value
$120.00

Annuity
$100.00 $80.00 $60.00 $40.00 $20.00 $0 1 2 Period 3 4 5 Cash Flows Future Value of Each Cash Flow

$ 80.00 6.0% 5

8 6 5

Annuity Present Value using a Time Line Period Cash Flows Future Value of Each Cash Flow FutureValue Annuity of Future Value using the Formula Future Value Annuity of Future Value using the FV Function Future Value

1 2 3 4 5 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 101.00 $ 95.28 $ 89.89 $ 84.80 $ 80.00 $ 450.97

$ 450.97

$ 450.97

Finance 305, FALL 2012 HW No. 2 Page 3

Annuity
Inputs Payments Discount Rate / Period Number of Periods Present Value

System of Four Annuity Variables

Annuity
$ 80.00 6.0% 5 $ 336.99 8 6 5 6
$120.00 $100.00 $80.00

$60.00
$40.00 $20.00 $0 1 2 Period 3 4 5

Cash Flows Present Value of Each Cash Flow

Annuity Present Value using a Time Line Period 0 1 2 3 4 5 Cash Flows $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 Present Value of Each Cash Flow $ 75.47 $ 71.20 $ 67.17 $ 63.37 $ 59.78 Present Value $ 336.99 Annuity of Present Value using the Formula Present Value $ 336.99 Annuity of Present Value using the PV Function Present Value $ 336.99

Finance 305, FALL 2012 HW No. 2 Page 4 Payment Payment using the Formula Payment using the PMT Function Discount Rate / Period Discount Rate / Per using the RATE Function Number of Periods Number of Periods using the NPER Function

$ 80.00 $ 80.00

6.0%

Finance 305, FALL 2012 HW No. 2 Page 5

Annuity
Inputs Payments Discount Rate / Period Number of Periods Present Value

Annuity
Present Value
$ 142.38 4.5% 6 $ 734.38
$160.00 $140.00 $120.00

4.5 6

$100.00

$80.00
$60.00 $40.00 $20.00 $0 1 2 3 Period 4 5 6

Cash Flows Present Value of Each Cash Flow

Annuity Present Value using a Time Line Period 0 1 2 3 4 5 6 Cash Flows $ 142.38 $ 142.38 $ 142.38 $ 142.38 $ 142.38 $ 142.38 $ 142.38 Present Value of Each Cash Flow $ 136.25 $ 130.38 $ 124.77 $ 119.39 $ 114.25 $ 109.33 Present Value $ 625.04 Annuity of Present Value using the Formula Present Value $ 734.38 Annuity of Present Value using the PV Function Present Value $ 734.38

Finance 305, FALL 2012 HW No. 2 Page 6

Annuity
Inputs Payments Discount Rate / Period Number of Periods

Future Value
$ 63.92 9.1% 4
$90.00 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $1 2 3

Annuity

9.1 4

Cash Flows Future Value of Each Cash Flow

Period

Annuity Present Value using a Time Line Period Cash Flows Future Value of Each Cash Flow FutureValue Annuity of Future Value using the Formula Future Value Annuity of Future Value using the FV Function Future Value

1 2 3 4 $ 63.92 $ 63.92 $ 63.92 $ 63.92 $ 83.01 $ 76.08 $ 69.74 $ 63.92

$ 292.75

$ 292.75

Finance 305, FALL 2012 HW No. 2 Page 7

Annuity
Inputs Payments Discount Rate / Period Number of Periods Present Value

System of Four Annuity Variables

Annuity
$60.00

53.00 7.0% 4 $ 179.52

$50.00 $40.00 $30.00 $20.00 $10.00 $0 1 2 Period 3 4 Cash Flows Present Value of Each Cash Flow

Annuity Present Value using a Time Line Period 0 1 2 3 4 Cash Flows $ 53.00 $ 53.00 $ 53.00 $ 53.00 Present Value of Each Cash Flow $ 49.53 $ 46.29 $ 43.26 $ 40.43 Present Value $ 179.52 Annuity of Present Value using the Formula Present Value $ 179.52 Annuity of Present Value using the PV Function Present Value $ 179.52

Finance 305, FALL 2012 HW No. 2 Page 8 Payment Number of periods Discount rate / period Present Value Payment using the Formula Payment using the PMT Function $ 20.27 10 7.00% $ 142.38 $ 20.27 $ 20.27

Discount Rate / Period Payments $ 173.00 Number of periods 13 Present Value $ 513.94 Discount Rate / Per using the RATE Function 32.82% Number of Periods 5 Payment $ 40.00 Discount rate / period 6.00% Present Value $ 168.49 Number of Periods using the NPER Function 5.0