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.

Your spreadsheet should look something like:

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)

Book1 – Microsoft Excel-QXHomeInsertPage LayoutFormulasDataReviewView?) – 0 xCutCalibri- 11′ Wrap TextE AutoSum -a Copy.A ACurrengFillA APasteFormat PainterBMerge &…