At a rate of 8%, what is the present value of the following cash flow stream? $0 at Time 0; $100 at the end of Year 1; $300 at the end of Year 2; $0 at the end of Year 3;

4 天之前 · How much must your annually payments be if you will completely retire the loan over the 25-year period by factor formula? Answer: Rs. 8,813.48. Perpetuity makes payments of Rs. 500 every year, with the first payment coming one year from today. If the discount rate is 5%, what is the present value of the perpetuity? Answer: Rs. 10,000.

Time Value of Money Practice Problems 1. You are looking to purchase a home automation system when you graduate in two years. You plan to deposit the money in an investment account earning 8 percent annually. The anticipated cost of the system in two years is $2,500. How much must you deposit today? 2.

Use a financial calculator and Excel to solve TVM problems. We can determine future value by using any of four methods: (1) mathematical equations, (2) calculators with financial functions, (3) spreadsheets, and (4) FVIF tables.

Show the timing of cash flows. Tick marks occur at the end of periods, so Time 0 is today; Time 1 is the end of the first period (year, month, etc.) or the beginning of the second period. Formulas. Financial Calculators (Basic keys: N, I/Y, PV, PMT, FV). Spreadsheet Software (Basic functions: PV, FV, PMT, NPER,RATE). use Microsoft Excel.