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Present Value Excel

This document contains examples of financial calculations using Excel functions such as NPV, EAR, PMT, FV, and annuity calculations. It shows how to calculate the number of periods using the NPER function, effective annual rate using EAR, present and future values of annuities, monthly mortgage payments using PMT, and the present value of a lottery payout in the form of an annuity due.

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Sanjai Ctt
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© © All Rights Reserved
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53 views17 pages

Present Value Excel

This document contains examples of financial calculations using Excel functions such as NPV, EAR, PMT, FV, and annuity calculations. It shows how to calculate the number of periods using the NPER function, effective annual rate using EAR, present and future values of annuities, monthly mortgage payments using PMT, and the present value of a lottery payout in the form of an annuity due.

Uploaded by

Sanjai Ctt
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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no.

of periods =nper(rate,pmt,pv,fv)

pv -25000 6.116255374
fv 50000
rate 0.12
pmt (periodic payment) 0

6.116255374
PV -10000
r 0.12
nper 1
pmt 0
₹ 11,200.00
fv -11424
r 0.12
nper 1
pmt 0
₹ 10,200.00
fv 16105
pv -10000
pmt 0
nper 5
10%
Finance.com has the following investment opportunity for a new high-speed computer. Should Finance.com make t
present value?

t Cash flow
0 $ (50,000)
1 25,000
2 20,000
3 15,000

Interest rate 7%

NPV: $3,077.73
uter. Should Finance.com make this investment? What is the net
Suppose Jane Christine makes a deposit in an account with the following stated annual interest rate and compound
What is the EAR of this account?

APR: 24% 0.24


Compounding periods per year: 12

EAR:
interest rate and compounding periods per year.
EAR: 18% 0.18
Compounding periods per year: 12

APR:
Example 4.20:
Mark Young wonLottery Valuation
the state lottery and will receive the following set of equal payments beginning one year from now
today?

Annual payment: $ 50,000


Number of years for paymen 20
Interest rate: 8%

Present value: PV of annuity


nning one year from now. What is the value of the payments
Future Value for Annuities
We can find the future value of an annuity using the Pmt argument in the FV function. Suppose you are saving for re
assumptions, how much will you have when you retire?

Example 4.21: Retirement Investing


Suppose you make the following deposits into a pension fund for retirement? How much will you have in your accou

Annual savings: $ 3,000


Number of years to save: 30
Interest rate: 6%

Future value:
ppose you are saving for retirement. Based on the following

will you have in your account when your golden years start?
Finding theannuity
To find the Annuitypayment,
PaymentExcel uses the PMT function. Suppose you are buying a house with the following terms
payment?

Purchase price: $ 175,000


Number of months for repayment: 240
Monthly interest rate: 0.50%

Monthly payment:
use with the following terms. What is your monthly mortgage
Example 4.23: DeYoung,
Suppose Mark Annuity Due
who(Payment
won the at the beginning)
lottery in a previous example, still wins the lottery but now the payments are
the value of his winnings today?

Beginning of period annuity deposit: $ 50,000


Number of years: 20
Interest rate: 8%

Present value:

20500.9871797
79854.2007416 117332.0192
323.9719877 297.2220071
265121.5741
315.4708037
but now the payments are in the form of an annuity due. What is

305293.7382

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