Documente Academic
Documente Profesional
Documente Cultură
Present
Year Cash flow value
1 100 90.91 <-- =B5/(1+$B$2)^A5
2 100 82.64 <-- =B6/(1+$B$2)^A6
3 100 75.13 <-- =B7/(1+$B$2)^A7
4 100 68.30 <-- =B8/(1+$B$2)^A8
5 100 62.09 <-- =B9/(1+$B$2)^A9
Present
Year Cash flow value
1 100 90.91 <-- =B5/(1+$B$2)^A5
2 200 165.29 <-- =B6/(1+$B$2)^A6
3 300 225.39 <-- =B7/(1+$B$2)^A7
4 400 273.21 <-- =B8/(1+$B$2)^A8
5 500 310.46 <-- =B9/(1+$B$2)^A9
Present
Year Cash flow value
0 -250 -250.00 <-- =B5/(1+$B$2)^A5
1 100 90.91 <-- =B6/(1+$B$2)^A6
2 200 165.29 <-- =B7/(1+$B$2)^A7
3 300 225.39 <-- =B8/(1+$B$2)^A8
4 400 273.21 <-- =B9/(1+$B$2)^A9
5 500 310.46 <-- =B10/(1+$B$2)^A10
Annuity
Period payment
1 1,000.00 <-- =B2
2 1,000.00
3 1,000.00
4 1,000.00
5 1,000.00
Annuity
Period payment
1 1,000.00 <-- =B2
2 1,060.00 <-- =$B$2*(1+$B$3)^(A11-1)
3 1,123.60 <-- =$B$2*(1+$B$3)^(A12-1)
4 1,191.02 <-- =$B$2*(1+$B$3)^(A13-1)
5 1,262.48 <-- =$B$2*(1+$B$3)^(A14-1)
Present value using Excel's NPV function 4,010.91 <-- =NPV(B5, B10:B14)
^B4)/(B5-B3)
COMPUTING THE VALUE OF AN INFITE GROWING ANNUITY
Periodic payment, C 1,000.00 <-- Starting at date 1
Growth rate of payments, g 6%
Discount rate, r 12%
Present value of annuity 16,666.67 <-- =B2/(B4-B3)
INTERNAL RATE OF RETURN
Cash
Year flow
0 -800
1 200
2 250
3 300
4 350
5 400
Investment at
beginning of Cash flow Return of
Year year at the end of year Income principal
1 800.00 200.00 177.28 22.72 <-- =C15-D15
2 777.28 250.00 172.25 77.75
3 699.53 300.00 155.02 144.98
4 554.55 350.00 122.89 227.11
5 327.44 400.00 72.56 327.44
6 0.00
=B15-E15
The remaining investment principal
in the year after the last cash flow is
zero, indicating that all the principal
has been repaid.
- =C15-D15
USING A LOAN TABLE TO FIND THE IRR
IRR? 24.44%
3.50
3.00
2.50
2.00
1.50
1.00 Discount rate
0.50
0.00
0% 10% 20% 30% 40%
6 100 8% 1000
7 100 10% 800
8 1,100 12%
600
NPV
14%
400
IRR 14.36% <-- =IRR(B3:B11) 16%
18% 200
20% 0
0% 5% 10%
Discount rate
, SO THERE IS ONLY ONE IRR
=D9-E9
SIMPLE FUTURE VALUE
Interest 10%
Account
Deposit at Interest Total in
balance,
Year beginning of earned during account, end
beginning of
year year year
year
1 0.00 1,000.00 100.00 1,100.00
2 1,100.00 1,000.00 210.00 2,310.00
3 2,310.00 1,000.00 331.00 3,641.00
4 3,641.00 1,000.00 464.10 5,105.10
5 5,105.10 1,000.00 610.51 6,715.61
6 6,715.61 1,000.00 771.56 8,487.17
7 8,487.17 1,000.00 948.72 10,435.89
8 10,435.89 1,000.00 1,143.59 12,579.48
9 12,579.48 1,000.00 1,357.95 14,937.42
10 14,937.42 1,000.00 1,593.74 17,531.17
<-- =D7+B7+C7
<-- =D8+B8+C8
=$B$2*(B7+C7)
A RETIREMENT PROBLEM
Interest 8%
Annual deposit 29,386.55
Annual retirement withdrawal 30,000
Account
Deposit at Interest Total in
balance,
Year beginning of earned during account, end
beginning of
year year year
year
1 0.00 29,386.55 2,350.92 31,737.48
2 31,737.48 29,386.55 4,889.92 66,013.95
3 66,013.95 29,386.55 7,632.04 103,032.54
4 103,032.54 29,386.55 10,593.53 143,012.62
5 143,012.62 29,386.55 13,791.93 186,191.10
6 186,191.10 -30,000.00 12,495.29 168,686.39
7 168,686.39 -30,000.00 11,094.91 149,781.30
8 149,781.30 -30,000.00 9,582.50 129,363.81
9 129,363.81 -30,000.00 7,949.10 107,312.91
10 107,312.91 -30,000.00 6,185.03 83,497.94
11 83,497.94 -30,000.00 4,279.84 57,777.78
12 57,777.78 -30,000.00 2,222.22 30,000.00
13 30,000.00 -30,000.00 0.00 0.00
Note: This problem has 5 deposits and 8 annual withdrawals, all made at the beginning of the year. The
beginning of year 13 is the last year of the retirement plan; if the annual deposit is correctly computed, the
balance at the beginning of year 13 after the withdrawal should be zero.
<-- =D7+B7+C7
1,050.80
1,050.60
1,050.40
1,050.20
1,050.00
1,049.80 Number of compounding intervals
1 10 100 1000
End-year
Compounding periods per year accretion
1 1,050.000 <-- =$B$2*(1+$B$3/A25)^A25
2 1,050.625 <-- =$B$2*(1+$B$3/A26)^A26
10 1,051.140
20 1,051.206
50 1,051.245
100 1,051.258
150 1,051.262
300 1,051.267
800 1,051.269