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  • CH 02 Annuity - Completed and Answers

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    NiketGhelani
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    This document contains information about calculating the present and future values of annuities using timelines, formulas, and financial functions. It provides examples of calculating the present value, future value, payment amount, discount rate, and number of periods for annuities. The document also shows a system of equations for solving for the four main annuity variables.

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    Ch 02 Annuity - Completed and Answers

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    This document contains information about calculating the present and future values of annuities using timelines, formulas, and financial functions. It provides examples of calculating the present value, future value, payment amount, discount rate, and number of periods for annuities. The document also shows a system of equations for solving for the four main annuity variables.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    33 views22 pages

    CH 02 Annuity - Completed and Answers

    Uploaded by

    NiketGhelani
    This document contains information about calculating the present and future values of annuities using timelines, formulas, and financial functions. It provides examples of calculating the present value, future value, payment amount, discount rate, and number of periods for annuities. The document also shows a system of equations for solving for the four main annuity variables.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 22

    ANNUITY Present Value

    Inputs
    Annuity
    Payment $39,894.00 398
    $140.00
    $120.00
    Discount Rate / Period 4.3% 7
    $100.00
    Number of Periods 6 6 $80.00
    Cash Flows
    $60.00
    $40.00 Present Va
    Each Cash
    $20.00
    $0.00
    0 1 2 3 4 5
    Period

    Annuity Present Value using a Time Line


    Period 0 1 2 3 4 5
    Cash Flows $39,894.00 $39,894.00 $39,894.00 $39,894.00 $39,894.00
    Present Value of Each Cash Flow $38,249.28 $36,672.37 $35,160.47 $33,710.90 $32,321.09
    Present Value $176,114.11

    Annuity Present Value using the Formula


    Present Value $207,102.70

    Annuity Present Value using the PV Function


    Present Value $207,102.70
    y

    Cash Flows

    Present Value of
    Each Cash Flow

    4 5
    ANNUITY Future Value
    Inputs Annuity
    $140.00
    Payment $100.00 10
    $120.00
    Discount Rate / Period 9.0% 9 $100.00
    $80.00
    Ca
    Number of Periods 3 3 $60.00
    $40.00 Fu
    Ca
    $20.00
    $0.00
    0 1 2 3 4 5
    Period

    Annuity Future Value using a Time Line


    Period 0 1 2 3 4
    Cash Flows $100.00 $100.00 $100.00 $100.00
    Future Value of Each Cash Flow $141.16 $129.50 $118.81 $109.00
    Future Value

    Annuity Future Value using the Formula


    Future Value $327.81

    Annuity Future Value using the FV Function


    Future Value $327.81
    Annuity

    Cash Flows

    Future Value of Each


    Cash Flow

    2 3 4 5
    Period

    5
    $100.00
    $100.00
    $598.47
    ANNUITY System of Four Annuity Variables
    Inputs
    Annuity
    Payment $150.00 15
    $140.00
    $120.00
    Discount Rate / Period 10.0% 10
    $100.00
    Number of Periods 3 3 $80.00
    Cash Flows
    $60.00
    Present Value $386.99 7 $40.00 Present Value of
    Each Cash Flow
    $20.00
    $0.00
    0 1 2 3 4 5
    Period

    Annuity Present Value using a Time Line


    Period 0 1 2 3 4 5
    Cash Flows $150.00 $150.00 $150.00 $150.00 $150.00
    Present Value of Each Cash Flow $136.36 $123.97 $112.70 $102.45 $93.14
    Present Value $568.62

    Annuity Present Value using the Formula


    Present Value $373.03

    Annuity Present Value using the PV Function


    Present Value $373.03

    Payment
    Payment using the Formula $155.61
    Payment using the PMT Function $155.61
    Discount Rate / Period
    Discount Rate / Per using the RATE Func 7.9%

    Number of Periods
    Num of Periods using the NPER Function 3
    ANNUITY Present Value
    Inputs
    Annuity
    Payment $150.00 15
    $140.00
    $120.00
    Discount Rate / Period 10.0% 10
    $100.00
    Number of Periods 3 3 $80.00
    Cash Flows
    $60.00
    $40.00 Present Value of
    Each Cash Flow
    $20.00
    $0.00
    0 1 2 3 4 5
    Period

    Annuity Present Value using a Time Line


    Period 0 1 2 3 4 5 6
    Cash Flows $150.00 $150.00 $150.00 $150.00 $150.00 $150.00
    Present Value of Each Cash Flow $136.36 $123.97 $112.70 $102.45 $93.14 $84.67
    Present Value $653.29

    Annuity Present Value using the Formula


    Present Value $373.03

    Annuity Present Value using the PV Function


    Present Value $373.03
    ANNUITY Future Value
    Inputs Annuity
    $140.00
    Payment $63.92 6
    $120.00
    Discount Rate / Period 9.1% 9 $100.00
    $80.00
    Ca
    Number of Periods 4 4 $60.00
    $40.00 Fu
    Ca
    $20.00
    $0.00
    0 1 2 3 4 5
    Period

    Annuity Future Value using a Time Line


    Period 0 1 2 3 4
    Cash Flows $63.92 $63.92 $63.92 $63.92
    Future Value of Each Cash Flow $83.01 $76.08 $69.74 $63.92
    Future Value $292.75

    Annuity Future Value using the Formula


    Future Value $292.75

    Annuity Future Value using the FV Function


    Future Value $292.75
    Annuity

    Cash Flows

    Future Value of Each


    Cash Flow

    2 3 4 5
    Period

    5
    ANNUITY System of Four Annuity Variables
    Inputs
    Annuity
    Payment $53.00 5
    $140.00
    $120.00
    Discount Rate / Period 7.0% 7
    $100.00
    Number of Periods 4 4 $80.00
    Cash Flows
    $60.00
    Present Value $179.52 3 $40.00 Present Value of
    Each Cash Flow
    $20.00
    $0.00
    0 1 2 3 4 5
    Period

    Annuity Present Value using a Time Line


    Period 0 1 2 3 4 5
    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 Present Value using the Formula


    Present Value $179.52

    Annuity Present Value using the PV Function


    Present Value $179.52

    Payment
    Payment using the Formula $53.00
    Payment using the PMT Function $53.00
    Discount Rate / Period
    Discount Rate / Per using the RATE Func 7.0%

    Number of Periods
    Num of Periods using the NPER Function 4
    ANNUITY System of Four Annuity Variables
    Inputs
    Annuity
    Payment $20.27 2
    $25.00

    Discount Rate / Period 7.0% 7 $20.00

    $15.00
    Number of Periods 10 10
    Cash Flows
    $10.00
    Present Value $142.38 2 Present Value of
    Each Cash Flow
    $5.00

    $0.00
    0 1 2 3 4 5 6 7 8 9 10 11
    Period

    Annuity Present Value using a Time Line


    Period 0 1 2 3 4 5 6 7 8
    Cash Flows $20.27 $20.27 $20.27 $20.27 $20.27 $20.27 $20.27 $20.27
    Present Value of Each Cash Flow $18.94 $17.70 $16.55 $15.46 $14.45 $13.51 $12.62 $11.80
    Present Value $142.37

    Annuity Present Value using the Formula


    Present Value $142.37

    Annuity Present Value using the PV Function


    Present Value $142.37

    Payment
    Payment using the Formula $20.27
    Payment using the PMT Function $20.27
    Discount Rate / Period
    Discount Rate / Per using the RATE Func 7.0%

    Number of Periods
    Num of Periods using the NPER Function 10
    9 10
    $20.27 $20.27
    $11.03 $10.30
    ANNUITY System of Four Annuity Variables
    Inputs
    Annuity
    Payment $173.00 17
    $200.00
    $180.00
    Discount Rate / Period 32.8% 32 $160.00
    $140.00
    $120.00
    Number of Periods 13 13
    $100.00 Cash Flows
    $80.00
    Present Value $513.94 10 $60.00 Present Value of
    Each Cash Flow
    $40.00
    $20.00
    $0.00
    0 1 2 3 4 5 6 7 8 9 10 11 12 13 14
    Period

    Annuity Present Value using a Time Line


    Period 0 1 2 3 4 5 6 7 8
    Cash Flows $173.00 $173.00 $173.00 $173.00 $173.00 $173.00 $173.00 $173.00
    Present Value of Each Cash Flow $130.25 $98.06 $73.83 $55.59 $41.85 $31.51 $23.72 $17.86
    Present Value $513.94

    Annuity Present Value using the Formula


    Present Value $513.94

    Annuity Present Value using the PV Function


    Present Value $513.94

    Payment
    Payment using the Formula $173.00
    Payment using the PMT Function $173.00
    Discount Rate / Period
    Discount Rate / Per using the RATE Func 32.8%

    Number of Periods
    Num of Periods using the NPER Function 13
    9 10 11 12 13
    $173.00 $173.00 $173.00 $173.00 $173.00
    $13.45 $10.12 $7.62 $5.74 $4.32
    ANNUITY System of Four Annuity Variables
    Inputs
    Annuity
    Payment $40.00 4
    $45.00
    $40.00
    Discount Rate / Period 6.0% 6 $35.00
    $30.00
    Number of Periods 5 5 $25.00
    Cash Flows
    $20.00
    Present Value $168.49 3 $15.00 Present Value of
    $10.00 Each Cash Flow
    $5.00
    $0.00
    0 1 2 3 4 5 6
    Period

    Annuity Present Value using a Time Line


    Period 0 1 2 3 4 5
    Cash Flows $40.00 $40.00 $40.00 $40.00 $40.00
    Present Value of Each Cash Flow $37.74 $35.60 $33.58 $31.68 $29.89
    Present Value $168.49

    Annuity Present Value using the Formula


    Present Value $168.49

    Annuity Present Value using the PV Function


    Present Value $168.49

    Payment
    Payment using the Formula $40.00
    Payment using the PMT Function $40.00
    Discount Rate / Period
    Discount Rate / Per using the RATE Func 6.0%

    Number of Periods
    Num of Periods using the NPER Function 5

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