Personal Finance - TVM
Simple Interest Compound Interest
5.00% 100 5.00% 100
Period Interest Balance Period Interest Balance
1 5.00 105.00 1 5.00 105.00
2 5.00 110.00 2 5.25 110.25
3 5.00 115.00 3 5.51 115.76
4 5.00 120.00 4 5.79 121.55
5 5.00 125.00 5 6.08 127.63
Present and Future Values FV= PV (1 + i )N
FV = Future Value ?
10.00% 100 PV = Present Value 34
Period Interest Balance i = the interest rate per period 5.00%
n= no. compounding periods 5
1 10.00 110.00
2 11.00 121.00 FV= $43.39
PV= FV/ ( 1 + i ) N
FV = Future Value 1000
PV = Present Value ? $747.26
i = the interest rate per period 6.00%
n= no. compounding periods 5
PV= FV/ ( 1 + i ) N
FV = Future Value 150,000
PV = Present Value ? PV = $112,088.73
i = the interest rate per period 6.00%
n= no. compounding periods 5
End of Year 1 2 3 4 5
Principal 112,089 118,814 125,943 133,499 141,509
Interest 6,725 7,129 7,557 8,010 8,491
Total 118,814 125,943 133,499 141,509 150,000
PV= FV/ ( 1 + i ) N Annual Semi Qtr Month Daily
FV = Future Value 150,000 150,000 150,000 150,000 150,000
PV = Present Value? $112,089 $111,614 $111,371 $111,206 $111,125
i = the interest rate per period 6.00% 3.00% 1.50% 0.50% 0.0164%
n= no. compounding periods 5 10 20 60 1825
Personal Finance - Annuities
PVoa = PMT [(1 - (1 / (1 + i)n)) / i]
i= 6%
n= 5 Excel fn PV
PMT = 5,000 ($21,061.82)
FV= 0
Year 1 2 3 4 5
Begin 21,061.82 17,325.53 13,365.06 9,166.96 4,716.98
Interest 1,263.71 1,039.53 801.90 550.02 283.02
Withdrawal -5,000 -5,000 -5,000 -5,000 -5,000
End 17,325.53 13,365.06 9,166.96 4,716.98 0.00
PVoa + PV
i= 1% per period (month) PVoa=
n= 24 Excel fn PV
PMT = -50 $1,062.17
FV= 0
+ +
FV= 500 PV= FV/ ( 1 + i ) N = $393.78
=
Present value of purchase on terms = $1,455.95
FVoa
i= 6%
n= 5 Excel fn FV
PMT = -5,000 $28,185.46
PV= 0
Year 1 2 3 4 5
Begin 0.00 5,000.00 10,300.00 15,918.00 21,873.08
Interest 0.00 300.00 618.00 955.08 1,312.38
Deposit 5,000 5,000 5,000 5,000 5,000
End 5,000.00 10,300.00 15,918.00 21,873.08 28,185.46
FVoa + FV
i= 0.5% per period (month)
n= 240 Excel fn FV
PMT = -100 $46,204.09
PV= 0
+
PV= 50,000 FV= PV (1 + i )N $165,510.22
Future value on this investment plan = $211,714.31
Personal Finance - Amortization
i= 0.583% per period (month)
n= 180
PV = 100,000 Excel fn PMT
FV= 0 -$898.83
Amortization Schedule
Month Principal Interest Balance
1 -315.49 -583.33 99,684.51
2 -317.34 -581.49 99,367.17
3 -319.19 -579.64 99,047.98
4 -321.05 -577.78 98,726.93
5 -322.92 -575.91 98,404.01
6 -324.80 -574.02 98,079.21
7 -326.70 -572.13 97,752.51
8 -328.61 -570.22 97,423.90
9 -330.52 -568.31 97,093.38
10 -332.45 -566.38 96,760.93
11 -334.39 -564.44 96,426.54
12 -336.34 -562.49 96,090.20
13 -338.30 -560.53 95,751.90
14 -340.28 -558.55 95,411.62
15 -342.26 -556.57 95,069.36
16 -344.26 -554.57 94,725.11
17 -346.27 -552.56 94,378.84
18 -348.29 -550.54 94,030.56
19 -350.32 -548.51 93,680.24
20 -352.36 -546.47 93,327.88
21 -354.42 -544.41 92,973.46
22 -356.48 -542.35 92,616.98
23 -358.56 -540.27 92,258.42
24 -360.65 -538.17 91,897.76
25 -362.76 -536.07 91,535.01
26 -364.87 -533.95 91,170.13
27 -367.00 -531.83 90,803.13
28 -369.14 -529.68 90,433.99
29 -371.30 -527.53 90,062.69
30 -373.46 -525.37 89,689.23
31 -375.64 -523.19 89,313.59
32 -377.83 -521.00 88,935.75
33 -380.04 -518.79 88,555.72
34 -382.25 -516.58 88,173.46
35 -384.48 -514.35 87,788.98
36 -386.73 -512.10 87,402.26
37 -388.98 -509.85 87,013.27
38 -391.25 -507.58 86,622.02
39 -393.53 -505.30 86,228.49
40 -395.83 -503.00 85,832.66
41 -398.14 -500.69 85,434.52
42 -400.46 -498.37 85,034.06
43 -402.80 -496.03 84,631.27
44 -405.15 -493.68 84,226.12
45 -407.51 -491.32 83,818.61
46 -409.89 -488.94 83,408.73
47 -412.28 -486.55 82,996.45
48 -414.68 -484.15 82,581.77
49 -417.10 -481.73 82,164.66
50 -419.53 -479.29 81,745.13
51 -421.98 -476.85 81,323.15
52 -424.44 -474.39 80,898.70
53 -426.92 -471.91 80,471.79
54 -429.41 -469.42 80,042.38
55 -431.91 -466.91 79,610.46
56 -434.43 -464.39 79,176.03
57 -436.97 -461.86 78,739.06
58 -439.52 -459.31 78,299.54
59 -442.08 -456.75 77,857.46
60 -444.66 -454.17 77,412.80
61 -447.25 -451.57 76,965.55
62 -449.86 -448.97 76,515.69
63 -452.49 -446.34 76,063.20
64 -455.13 -443.70 75,608.07
65 -457.78 -441.05 75,150.29
66 -460.45 -438.38 74,689.84
67 -463.14 -435.69 74,226.70
68 -465.84 -432.99 73,760.86
69 -468.56 -430.27 73,292.31
70 -471.29 -427.54 72,821.02
71 -474.04 -424.79 72,346.98
72 -476.80 -422.02 71,870.17
73 -479.59 -419.24 71,390.59
74 -482.38 -416.45 70,908.20
75 -485.20 -413.63 70,423.01
76 -488.03 -410.80 69,934.98
77 -490.87 -407.95 69,444.11
78 -493.74 -405.09 68,950.37
79 -496.62 -402.21 68,453.75
80 -499.51 -399.31 67,954.24
81 -502.43 -396.40 67,451.81
82 -505.36 -393.47 66,946.45
83 -508.31 -390.52 66,438.14
84 -511.27 -387.56 65,926.87
85 -514.25 -384.57 65,412.61
86 -517.25 -381.57 64,895.36
87 -520.27 -378.56 64,375.09
88 -523.31 -375.52 63,851.78
89 -526.36 -372.47 63,325.42
90 -529.43 -369.40 62,795.99
91 -532.52 -366.31 62,263.47
92 -535.62 -363.20 61,727.85
93 -538.75 -360.08 61,189.10
94 -541.89 -356.94 60,647.21
95 -545.05 -353.78 60,102.15
96 -548.23 -350.60 59,553.92
97 -551.43 -347.40 59,002.49
98 -554.65 -344.18 58,447.84
99 -557.88 -340.95 57,889.96
100 -561.14 -337.69 57,328.82
101 -564.41 -334.42 56,764.41
102 -567.70 -331.13 56,196.71
103 -571.01 -327.81 55,625.70
104 -574.35 -324.48 55,051.35
105 -577.70 -321.13 54,473.66
106 -581.07 -317.76 53,892.59
107 -584.45 -314.37 53,308.14
108 -587.86 -310.96 52,720.27
109 -591.29 -307.53 52,128.98
110 -594.74 -304.09 51,534.24
111 -598.21 -300.62 50,936.02
112 -601.70 -297.13 50,334.32
113 -605.21 -293.62 49,729.11
114 -608.74 -290.09 49,120.37
115 -612.29 -286.54 48,508.08
116 -615.86 -282.96 47,892.21
117 -619.46 -279.37 47,272.76
118 -623.07 -275.76 46,649.69
119 -626.71 -272.12 46,022.98
120 -630.36 -268.47 45,392.62
121 -634.04 -264.79 44,758.58
122 -637.74 -261.09 44,120.84
123 -641.46 -257.37 43,479.39
124 -645.20 -253.63 42,834.19
125 -648.96 -249.87 42,185.23
126 -652.75 -246.08 41,532.48
127 -656.56 -242.27 40,875.92
128 -660.39 -238.44 40,215.54
129 -664.24 -234.59 39,551.30
130 -668.11 -230.72 38,883.19
131 -672.01 -226.82 38,211.18
132 -675.93 -222.90 37,535.25
133 -679.87 -218.96 36,855.38
134 -683.84 -214.99 36,171.54
135 -687.83 -211.00 35,483.71
136 -691.84 -206.99 34,791.87
137 -695.88 -202.95 34,096.00
138 -699.93 -198.89 33,396.06
139 -704.02 -194.81 32,692.04
140 -708.12 -190.70 31,983.92
141 -712.26 -186.57 31,271.66
142 -716.41 -182.42 30,555.25
143 -720.59 -178.24 29,834.66
144 -724.79 -174.04 29,109.87
145 -729.02 -169.81 28,380.85
146 -733.27 -165.55 27,647.58
147 -737.55 -161.28 26,910.03
148 -741.85 -156.98 26,168.17
149 -746.18 -152.65 25,421.99
150 -750.53 -148.29 24,671.46
151 -754.91 -143.92 23,916.55
152 -759.32 -139.51 23,157.23
153 -763.74 -135.08 22,393.49
154 -768.20 -130.63 21,625.29
155 -772.68 -126.15 20,852.61
156 -777.19 -121.64 20,075.42
157 -781.72 -117.11 19,293.70
158 -786.28 -112.55 18,507.42
159 -790.87 -107.96 17,716.55
160 -795.48 -103.35 16,921.07
161 -800.12 -98.71 16,120.94
162 -804.79 -94.04 15,316.15
163 -809.48 -89.34 14,506.67
164 -814.21 -84.62 13,692.46
165 -818.96 -79.87 12,873.51
166 -823.73 -75.10 12,049.78
167 -828.54 -70.29 11,221.24
168 -833.37 -65.46 10,387.87
169 -838.23 -60.60 9,549.63
170 -843.12 -55.71 8,706.51
171 -848.04 -50.79 7,858.47
172 -852.99 -45.84 7,005.48
173 -857.96 -40.87 6,147.52
174 -862.97 -35.86 5,284.55
175 -868.00 -30.83 4,416.55
176 -873.07 -25.76 3,543.49
177 -878.16 -20.67 2,665.33
178 -883.28 -15.55 1,782.05
179 -888.43 -10.40 893.62
180 -893.62 -5.21 0.00
Harry and Frances Smith, Statement of Net Worth: 01/01/06
Assets Liabilities and Net Worth
Cash 8,000 Liabilities
Mortgage Payable - Residence 220,000
Investments Mortgage Payable - Other 0
Certificates of Deposit 11,000
Company Retirement Account 98,000 Total Liabilities 220,000
Stock Holdings 27,000
Total Investments 136,000 Estimated Income Taxes
Real Estate Net Worth 296,000
Personal Residence 350,000
Other Assets
Automobiles 20,000
Cash Value of Life Insurance 2,000
Total Other Assets 22,000
Total Assets $516,000 Total Liabilities and Net Worth $516,000
Your Statement
Assets Liabilities
Cash $__________ Notes Payable $__________
Checking $__________ Accounts/Bills Due $__________
Savings $__________ Credit Cards Payable $__________
Securities $__________ Vehicle Loans $__________
Accounts/Notes Receivable $__________ Unpaid Taxes $__________
Real Estate $__________ Real Estate Mortgages Payable $__________
Household Goods $__________ Land Contracts Payable $__________
Vehicles $__________ Life Insurance Loans $__________
Cash Value Life Insurance $__________ Other Liabilities $__________
401(k) Plan $__________ TOTAL LIABILITIES $__________
Individual Retirement Accounts $__________ NET WORTH $__________
Other Assets $__________
TOTAL ASSETS $__________ TOTAL LIAB AND NET WORTH $__________
(Assets always equal Total Liabilities and Net Worth)
Data for Steeles' Expense Distribution
Housing Taxes Food Transport Leisure Utilities Insurance Clothing Others Savings
28.0% 23.3% 10.6% 10.3% 6.5% 4.8% 3.3% 2.7% 7.2% 3.3%
Consumer Price Index (Source BLS): adjusted to 1998 as index.
1998 163.0 1998 100.0 100,000
1999 166.6 2.2 1999 102.2 2.2% 102,209
2000 172.2 3.4 2000 105.6 3.4% 105,644
2001 177.0 2.8 2001 108.6 2.8% 108,589
2002 179.9 1.6 2002 110.4 1.6% 110,368
2003 184.0 2.3 2003 112.9 2.3% 112,883
2004 188.9 2.7 2004 115.9 2.7% 115,890
2005 195.3 3.4 2005 119.8 3.4% 119,816
2006* 202.5 3.7 2006* 124.2 3.7% 124,233
Ordinary Annuity
NPer Rate Pmt FV Type
20 6% -800
Nper 1+Rate Pmt Remaining
f(PV)=
0 $9,175.94
1 1.060 -800 $8,926.49
2 1.060 -800 $8,662.08
3 1.060 -800 $8,381.81
4 1.060 -800 $8,084.72
5 1.060 -800 $7,769.80
6 1.060 -800 $7,435.99
7 1.060 -800 $7,082.15
8 1.060 -800 $6,707.08
9 1.060 -800 $6,309.50
10 1.060 -800 $5,888.07
11 1.060 -800 $5,441.35
12 1.060 -800 $4,967.84
13 1.060 -800 $4,465.91
14 1.060 -800 $3,933.86
15 1.060 -800 $3,369.89
16 1.060 -800 $2,772.08
17 1.060 -800 $2,138.41
18 1.060 -800 $1,466.71
19 1.060 -800 $754.72
20 1.060 -800 $0.00