# For those that are a bit apprehensive about doing these calculations, below is a worked out problem that is likely the most complicated that you will…

For those that are a bit apprehensive about doing these calculations, below is a worked out problem that is likely the most complicated that you will come across in this class – but it is straightforward.

• The rate is 7% and the investment is for 5 years that is compounded annually (so when the investment is compounded annually, then the number of years is the NPer that you need to calculate – if the investment compounds semiannually, quarterly, monthly or daily, then see the chart I created in another post to get the number of periods).
• The payment was \$15,000 for every term you would add \$15,000 each year at the beginning of the year. (Enter in Excel as a negative Number as this is an outflow to you)
• Also there is \$175,000 amount that you will deposit in the investment today… so this is the Present Value. is \$175,000. >(enter in Excel as a negative number as this is an outflow to you)
• Enter Type 1 because, you’re making the payment at the beginning of the period.

Rate

7%

Period

5

Payment

\$  (15,000)

Present Value

\$  (175,000)

Type

1

Future Value

=FV(B3,B4,B5,B6,B7)

\$337,745.91

Therefore, our future value is \$??????? (For reference – the answer is in the table)

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