Build your Each student will be required to build an excel model depicting

model the application of time value of money concepts.

Exercise
Individual Excel Assignment
Marks Allocated: 10 Marks
Date of Submission and Upload: 12 December 2024 (In the class only)

Instructions: Use of AI will render zero marks. The excel sheet must be solved with the formula
(i.e., equations), without which zero marks will be awarded. Please read the following
instructions carefully and abide by them.

Prepare one formula enabled excel sheet to express the scenario given against your name.

Roll No Excel Assignment

a) Car Loan of 5,00,000 for 5 years. Rate of Interest is 9.55% per annum. EMI on
Monthly basis.
7 b) Also calculate the annual EMI
Personal Loan of 2,50,000 for 13 years. Rate of Interest is 11.50% per annum.
a) Calculate EMI on Monthly basis.
48 b) Calculate annual EMI
You have taken a Gold Loan of 3,00,000 for 2 year. Rate of Interest is 15.00% per
annum.
a) Calculate EMI on Monthly basis.
3 b) Calculate annual EMI
A person wishes to have a future sum of Rs. 1,00,000 for his son’s education after 10
years from now. What is the single payment that the deposit now so that he gets the
8 desired amount after 10 years? The bank gives 15% interest rate compounded annually.
Home Loan of 15,00,000. Duration 20 years. Rate of Interest 10.42% per annum.
a) Calculate EMI on Monthly basis.
4 Calculate annual EMI
13 Prepare a term loan of amount Rs 40 lakh for a male of 44 years and the duration of
payment of EMI on yearly basis is 16 years. Rate of Interest is 8.50% per annum.
a)What is EMI per annum basis?
 b)Calculate EMI on yearly basis.

You are considering two investments: one offers an annual return of 10% compounded
monthly, while the other offers 9% compounded annually. Which investment is better
over a 5-year period? Show the calculations and discuss how compounding affects the
6 outcome.
You are taking out a loan of $20,000 to be repaid over 5 years with an annual interest
rate of 7%. Calculate the annual payment required to fully repay the loan using the
annuity formula. How would your annual payment change if the loan term were
65 extended to 7 years?
You plan to invest ₹50,000 in a Public Provident Fund (PPF) account every year,
which yields an annual interest rate of 7%, compounded annually. How much will your
investment be worth after 12 years?
b) How much will your investment be worth after 15 years?
2
You invest ₹1,00,000 in a fixed deposit account that offers an interest rate of 6% per
annum, compounded monthly. How much will your investment be worth after 5 years?
b) How much will your investment be worth if interest rate of 6% per annum,
64 compounded yearly.
Two investment options are available to you. The first option offers an interest rate of
8% compounded quarterly, while the second offers 8% compounded annually. If you
invest ₹75,000 in both options for 6 years, which option will yield a higher future
9 value? Show your calculations for both scenarios.
You deposit ₹20,000 in a savings account that offers 5% annual interest. The interest is
compounded both annually and quarterly. Calculate the future value of the deposit after
10 years for both compounding frequencies and determine which compounding method
63 results in a higher future value.
You deposit ₹20,000 in a savings account that offers 5% annual interest. The interest is
compounded both annually and quarterly. Calculate the future value of the deposit after
10 years for both compounding frequencies and determine which compounding method
10 results in a higher future value.
 You plan to invest ₹2,00,000 in a retirement fund that promises an annual return of
12%, compounded annually. How much will your investment be worth after 25 years?
b) How much will your investment be worth annual if return of 12%, compounded
61 quarterly.
You have two investment options. The first option offers ₹10,000 today and ₹15,000 in
5 years. The second option offers ₹8,000 today and ₹18,000 in 5 years. If the discount
rate is 6% compounded annually, calculate the present value of both options and
11 determine which one is more valuable.
Emily deposits $8,000 in an account that compounds annually. The interest rate is 4%
for the first 2 years, 5% for the next 3 years, and 6% for the last 5 years. What will be
5 the total value of the account after 10 years?
You are considering two investment options:

a) ₹100,000 invested at 5% annually, compounded annually.

b) ₹100,000 invested at 5% annually, compounded quarterly.
Calculate the future value of both investments after 6 years and determine which one
60 yields a higher return.
You have two investment options:

a) Option A: ₹50,000 invested today, and you will receive ₹60,000 after 3 years.

b) Option B: ₹50,000 invested today, and you will receive ₹70,000 after 5 years.

If the annual discount rate is 6%, which option is more valuable in present value terms?
15
Sarah invests $5,000 in a savings account. The account compounds annually, and the
interest rate is expected to remain at 6% for the first 2 years, increase to 7% for the next
4 years, and then increase to 8% for the final 3 years. What will be the total amount in
59 her account after 9 years?
You plan to contribute ₹3,000 every year to a retirement account, and you expect an
annual return of 6%. How much will the account be worth after 25 years?
57 b) How much will the account if annual return of 6% compounded monthly.
56 You decide to contribute ₹5,000 every year to a college savings account for your child.
The account earns 8% annually. How much will the account be worth after 18 years?
 b) How much will the account be worth after 18 years if account earns 6% annually.

You contribute ₹8,000 annually to an emergency fund with an expected return of 5%

per year. How much will you have in the account after 15 years?
b) How much will you have in the account if you invest Rs. 8000 only once after 15
16 years at same interest rate (5%).
You plan to contribute ₹7,500 every year to a fund for your child's education, and the
account earns 6% interest annually. How much will the account be worth in 25 years?
b) How much will you have in the account if you invest Rs. 7500 only once after 25
55 years at same interest rate (6%).
A 30-year-old person plans to invest ₹15,000 at the end of each year for the next 20
years in a bank that offers a 10% annual interest rate, compounded annually. What will
the maturity value of the account be when the person reaches 50 years old?
b) What will the maturity value of the account if 10% annual interest rate, compounded
17 quarterly.
A person, aged 40, invests ₹20,000 at the end of each year for the next 30 years. The
account earns 15% interest, compounded annually. What will be the maturity value of
the account when the person turns 70 years old?
b) What will be the maturity value of the account if 15% annual interest rate,
19 compounded monthly.
A mutual fund offers a 10% annual return, compounded quarterly, for a 2-year
investment. If you invest ₹200,000 in this mutual fund, how much would you expect to
receive at the end of 2 years?

Questions:
a) Calculate the future value of the investment.
18 b) Calculate the effective annual interest rate.
20 Rohan, a finance manager at a multinational company, is considering two investment
options for his company's surplus funds. Option A offers a 5% annual interest rate for 3
years, compounded annually. Option B offers a 6% annual interest rate for 2 years,
compounded semi-annually. Which investment option would you recommend to Rohan
 and why?
You have been awarded a scholarship, and you can choose between two options:
Option 1: A lump sum payment of ₹100,000 at the end of year 2.

Option 2: ₹15,000 annually for the next 10 years.

The scholarship fund compounds annually at an interest rate of 8%. Which option is
more valuable today?
54
You have been awarded a scholarship with the following two options:
Option 1: A lump sum payment of ₹50,000 year 1.

Option 2: ₹8,000 annually for the next 7 years.

The scholarship fund pays an annual interest rate of 5%. Which option would provide a
higher value at the end of 7 years?
53
You are given the choice between two scholarship payment methods:
Option 1: ₹50,000 paid at the end of 2nd year .

Option 2: ₹7,000 annually for 10 years.

The scholarship earns 10% annually. What is the present value of Option 2, and which
option is more valuable?
21
You plan to invest in an annuity that pays $5,000 annually for the next 10 years. The
discount rate is 8%.
a. Calculate the present value (PV) of the annuity.
52 b. How does the PV change if the discount rate increases to 10%?
You invest $10,000 today in an account that earns 6% annual interest, compounded
annually.
a. Calculate the future value (FV) of the investment after 10 years.
22 b. What will the FV be if the interest is compounded semi-annually?
You take out a loan of $200,000 with an annual interest rate of 5% for 15 years.
a. Calculate the monthly payment using the formula.
b. Calculate the yearly payment using the formula.
23
51 You invest $5,000 in a savings account that offers 5% annual interest, compounded
 annually.
a. Calculate the total amount (future value) in the account after 10 years.
b. If the interest is compounded quarterly, how does the future value change?
A principal amount of $15,000 is invested at 6% annual interest for 10 years.
Calculate the future value if the interest is compounded:
o Semi-annually
o Monthly
24 Which compounding frequency yields the highest future value?
You plan to deposit $500 at the end of each year into an account that earns 5% annual
interest, compounded monthly, for the next 10 years.
a. Calculate the total future value of the investment using the FV function.
50 b. How does the future value change if the annually deposit increases to $1,000?
You want to have $50,000 in 15 years. The account offers 7% annual interest,
compounded annually.
a. Calculate how much you need to invest today to reach your goal.
25 b. What happens to the present value if the interest rate decreases to 5%?
You borrow $30,000 at 8% annual interest, compounded annually, and you plan to
repay it over 5 years.
a. Calculate the monthly payment.
[b.] Calculate the annual payment.
49
You want to save $1,000,000 by retirement in 30 years. You plan to make equal annual
deposits into an account earning 6% annual interest, compounded annually.
a. Calculate the amount you need to deposit each year.
26 b. If the interest rate increases to 8%, how does your annual deposit change?
The current price of a car is $30,000, and the inflation rate is expected to be 3% per
year.
a. Calculate the price of the car after 10 years using the compounding formula.
1 b. Calculate the price of the car after 10 years if inflation increases to 6.5% .
27 Scenario 1: Invest $10,000 at 7% annual interest, compounded quarterly, for 15
years.
 Scenario 2: Invest $5,000 annually for 15 years at 6% annual interest, compounded
annually.
a. Calculate the future value for both scenarios using Excel.
b. Which scenario results in a higher final value?
You want to save for your child’s college education, which will cost $80,000 in 18
years. Your savings account earns 4% annual interest, compounded monthly.
a. Calculate how much you need to save monthly to reach your goal.
46 b. How does the required monthly savings change if the interest rate increases to 5%?
You will receive $5,000 per year for the next 10 years, and the discount rate is 6%
per year.
a. Calculate the present value (PV) of the annuity using formula in Excel.
28 b. How does the present value change if the discount rate increases to 8%?
You plan to deposit $1,000 at the end of each year into an account earning 5% annual
interest for 15 years.
a. Calculate the future value (FV) of the annuity using the formula in excel.
b. If the deposit is made at the beginning of each year (annuity due), how does the
45 future value change?
You take out a loan of $150,000 at an annual interest rate of 7%, with monthly
payments over 20 years.
a. Calculate the monthly payment using formula in excel
b. Calculate the annual payment using formula in excel
29
You are offered an annuity that pays $3,000 annually for 8 years. The discount rate is
5% per year.
a. Calculate the present value of the annuity using the formula.
b. Compare this value with the present value of the same annuity if payments are made
31 at the beginning of each year.
44 You want to accumulate $1,000,000 by retirement in 30 years. You plan to make equal
annual contributions at the end of each year into an account earning 6% annual
interest.
a. Calculate the amount you need to contribute each year using the formula in excel.
 b. If you start contributing at the beginning of each year, how much will you need to
save annually?
You are considering an investment that pays $10,000 per year forever, starting one
year from now. The required rate of return is 8%.
a. Calculate the present value of the perpetuity using the perpetuity formula:
33 b. How the value of perpetuity changes if required rate of return changes to 10%.
A company offers you the following payment schedule for a total of 5 years:
Year Payment ($)
1 2,000
2 3,000
3 4,000
4 5,000
5 6,000
The discount rate is 6% per year.
a. Calculate the present value of the cash flows using Excel. b. If the cash flows
32 represent an annuity of Rs. 2000 every year., how does the present value change?
A company offers you the following payment schedule for a total of 5 years:

Year Payment ($)

1 1,500
2 2,500
3 3,500
4 4,500
5 5,500
The discount rate is 8% per year.

a. Calculate the present value of the cash flows using Excel. Manually discount each
payment and sum them up.

b. If the cash flows represent an annuity of Rs. 1500 every year, due, how does the
present value change?

34
36 A company is considering leasing equipment for a payment of $10,000 per year for 5
years, with payments made at the start of each year. Alternatively, the company can
buy the equipment for $40,000 upfront. The discount rate is 7% per year.
 a. Calculate the present value of the lease payments (annuity due).
b. Should the company lease or buy the equipment?
You are offered two separate annuities:
Annuity A: $3,000 annually for 8 years, starting one year from now.
Annuity B: $2,500 annually for 10 years, starting immediately.
The discount rate is 5% per year.
a. Calculate the present value of both annuities.
38 b. Which annuity is more valuable?
You are considering an investment that pays $12,000 per year forever, starting one year
from now. The required rate of return is 9%.

a. Calculate the present value of the perpetuity using the perpetuity formula.

b. How does the value of the perpetuity change if the required rate of return changes to
5%?

39
40 A company offers the following payment schedule for a total of 7 years:

Year Payment ($)

1 4,000
2 4,500
3 5,000
4 5,500
5 6,000
6 6,500
7 7,000
The discount rate is 12% per year.

a. Calculate the present value of the cash flows using Excel. Manually discount each
payment and sum them up.
b. If these cash flows represent an annuity of $4,000 every year, due, how does the
present value change?
 You plan to deposit $1,500 at the end of each year into an account earning 4% annual
interest for 20 years.

a. Calculate the future value (FV) of the annuity using the formula in Excel.

b. If the deposit is made at the beginning of each year (annuity due), how does the
future value change?

42
A company offers the following payment schedule for a total of 4 years:

Year Payment ($)

1 1,000
2 2,000
3 3,000
4 4,000
The discount rate is 6% per year.

a. Calculate the present value of the cash flows using Excel. Manually discount each
payment and sum them up.

b. If the payments represent an annuity of $1,000 every year, due, how does the present
value change?

43