Present and Future Values

Inputs Author: Author:

Step 2 Step 3
a Annual Saving $ 100,000.00 =PV(rr,n,-A) =A*((1-(1/(1+rr)^n
Number of Years (n<=20) 10
Interest Rate (rr) 8%
Expected Annual Inflation Rate (inflrate) 3%
Growth Rate (g) 10%

Computation Using
Table Function Formula
b Annuity in arrears
PV $671,008.14 671008.1398941
FV $1,448,656.25 $ 1,448,656.25

Annuity in Advance
PV $724,688.79 $ 724,688.79
FV $1,564,548.75 $ 1,564,548.75

d The real rate of return 4.85%

FV amount (real) $1,249,272.48 $ 1,249,272.48 Au
St
=A

Question 1:
a) One would like to save 100000Afs annually for the next 10 years and invest that on assets earning 10% per year,
b) Calculate the present and future value of the annuity both in case s/he invests at the beginning and end of the ye
c) How much would the values be if the number of contributions increases to 15 and the interest rate to increase to
d) How much would the real amount of the FV would be if the inflation rate is 3%? Considering the information from
How do you check the model to be error free?
 Author:
Step 3 Author:
=A*((1-(1/(1+rr)^n))/rr) Step 4
=FV(rr,n,-A,0)

Author:
Step 5
=A*((1+rr)^n-1)/rr
Author:
Author: Step 8
Step 6 =FV(rr,n,-A,0,1)
=PV(rr,n,-A,0,1)

Author:
Step 7
=A*(1+rr)*((1-(1/(1+rr)^n))/rr)

Author:
Step 9
=A*(1+rr)*((1+rr)^n-1)/rr

Author:
Step 10
=((1+rr)/(1+Inflrate))-1
Author:
Step 11
=A*((1+k)^n-1)/k

sets earning 10% per year, interest income. How much money would s/he have in 10 years?
beginning and end of the year?
interest rate to increase to 10% after the 10nth year.
dering the information from part a).
 Present and Future Values
Inputs Author: Author:
Step 2 Step 3
a Annual Saving $ 100,000.00 =PV(rr,n,-A) =A*((1-(1/(1+rr)^n
Number of Years (n<=20) 15
Interest Rate (rr) 10%
Expected Annual Inflation Rate (inflrate) 3%

Computation Using
Table Function Formula
b Annuity in arrears
PV $760,607.95 760607.9506308
FV $3,177,248.17 $ 3,177,248.17

Annuity in Advance
PV $836,668.75 $ 836,668.75
FV $3,494,972.99 $ 3,494,972.99
Au
St
c The real rate of return 6.80% =(
d FV amount (real) $2,473,790.21 $ 2,473,790.21

Question 1:
a) One would like to save 100000Afs annually for the next 10 years and invest that on assets earning 10% per year,
b) Calculate the present and future value of the annuity both in case s/he invests at the beginning and end of the ye
c) How much would the values be if the number of contributions increases to 15 and the interest rate to increase to
d) How much would the real amount of the FV would be if the inflation rate is 3%? Considering the information from
How do you check the model to be error free?
 Author: Author:
Step 3 Step 4
=A*((1-(1/(1+rr)^n))/rr) =FV(rr,n,-A,0)

Author:
Step 5
=A*((1+rr)^n-1)/rr

Author:
Step 6
=PV(rr,n,-A,0,1) Author:
Step 7
=A*(1+rr)*((1-(1/(1+rr)^n))/rr)
Author:
Step 8
=FV(rr,n,-A,0,1)

Author:
Author: Step 9
Step 10 =A*(1+rr)*((1+rr)^n-1)/rr
=((1+rr)/(1+Inflrate))-1

Author:
Step 11
=A*((1+k)^n-1)/k
ssets earning 10% per year, interest income. How much money would s/he have in 10 years?
beginning and end of the year?
e interest rate to increase to 10% after the 10nth year.
idering the information from part a).