PMT by fanzhongqing

VIEWS: 9 PAGES: 14

									Present Value
                            My prize gives me $100 each month for 10 years. What
                            is its PV (the present value) assuming the per annum
pmt                 -100    rate is 10%
years                 10
                            What do we mean by PV in this problem?
APR                 10%
                            =PV(rate,nper, pmt, [fv],[type])
PV              $7,567.12
                            Why is PV answer negative?


pmt                 -100    My prize gives me $100 each month for 10 years and also
years                 10    at the end I get a lump sum of $500. What is its PV? If the
APR                 10%     rate is 10% pa find the present value assuming the per
                            annum rate is 10%
fv                   500
                            =PV(rate,nper, pmt, [fv],[type])
PV              $7,382.41
make pmt -100 because the bank is loosing money
is loosing money
Future Value
                       I deposit $100 each month into a saving account. The
                       interest rate is 8% pa. What formula should I use to find
pmt             100    how much I can expect after 3 yea
years             3
APR              8%    Future value =FV(rate, nper, pmt, [pv],[type])

                       The FV function includes an optional pv argument. Modify
FV         $4,053.56   the problem above in such a way that we would need to
                       use this pv argument.
Payment
                                                   =PMT(rate, nper, pv, [fv], [type])

PV                1000
APR                 8%
nper                 1

Monthly
pmt             -$86.99 =PMT(rate/12,nper*12,PV)

Semimonthly
pmt             -$43.42 =PMT(rate/24,nper*24,PV)

Weekly
pmt             -$20.03 =PMT(rate/52,nper*52,PV)

Total of all payments (semimonthly)                Why are some Excel results a penny different from the image taken from the
Excel           -$521.04
                                                   Royal Bank's website?
Bank            -$521.16
Difference         $0.12
                                                   How does the Bank compensate for this?
                                                   Explain =ROUND(quantity, 2) and ROUNDUP and ROUNDDOWN




                                                          1) decimals were different
                                                          2)
Number of Periods
                            I plan to save $250 each month until I have $100,000 in the
pmt                 250     saving acount. Assuming a rate of 8% pa, how many monthly
fv         $ 100,000.00     payments must I make?
APR                  8%
                            Number of periods =NPER(APR/12,-pmt,0,fv)
nper        195.5413697
years               16.3

Let's check that out
FV            $100,000.00
Rate
                            I plan to save $400 each month for
pmt                 400     25 years to give myself a pension. If
                            my target is $500,000 what must
years                 25
                            the APR be during this time?
fv       $   500,000.00

APR                9.65%


Let's check that out
FV            $500,000.00
PPMT and IPMT
                                       I take out a $250,000 mortgage at 6% over 25 years
pv            $ 250,000.00             What is my monthly payment?                                Most of the early payments go
APR                     6%             How much does towards the principal, how much              towards paying interest. Very
years                    25            towards the interest                                       little goes toward the
                                                                                                  principal.
Pmt              -$1,610.75            In the early periods, most of the payment is used to pay
                                       off interest                                               You do not have much EQUITY
                                                                                                  after 5 years
                                       Canadian mortgages are a bit more complicated than
                                       this but the overall picture is correct

Month         PPMT               IPMT           $1,800
          1           $360.75      $1,250.00
         12           $381.10      $1,229.66    $1,600
         24           $404.60      $1,206.15    $1,400
         36           $429.56      $1,181.19    $1,200
         48           $456.05      $1,154.70
         60           $484.18      $1,126.57    $1,000
                                                                                                                         IPMT
         72           $514.04      $1,096.71      $800
         84           $545.75      $1,065.00                                                                             PPMT
                                                  $600
         96           $579.41      $1,031.34
        108           $615.15       $995.61       $400
        120           $653.09       $957.67       $200
        132           $693.37       $917.38
                                                    $0
        144           $736.13       $874.62
        156           $781.54       $829.22
        168           $829.74       $781.01
        180           $880.92       $729.84
        192           $935.25       $675.50
        204           $992.94       $617.82
        216          $1,054.18      $556.58
        228          $1,119.20      $491.56
240   $1,188.23   $422.53
252   $1,261.51   $349.24
264   $1,339.32   $271.43
276   $1,421.93   $188.83
288   $1,509.63   $101.12
300   $1,602.74     $8.01
y payments go    Original loan          $ 250,000                      This assumes the house is still worth
interest. Very   Owing after 5 years    $ 224,830                      $250,000.
                 Equity                 $  25,170                      The housing market can be volatile.
                 Total payments         $  96,645


e much EQUITY
                         Home equity, the difference between the market
                         value and unpaid mortgage balance on a home



                 Month                  PPMT             Rermaining
                                    1          $360.75   $249,639.25
                                    2          $362.56   $249,276.69
                                    3          $364.37   $248,912.32
                                    4          $366.19   $248,546.13
                                    5          $368.02   $248,178.10
                                    6          $369.86   $247,808.24
        IPMT
                                    7          $371.71   $247,436.53
        PPMT                        8          $373.57   $247,062.96
                                    9          $375.44   $246,687.52
                                   10          $377.32   $246,310.20
                                   11          $379.20   $245,931.00
                                   12          $381.10   $245,549.90
                                   13          $383.00   $245,166.90
                                   14          $384.92   $244,781.98
                                   15          $386.84   $244,395.14
                                   16          $388.78   $244,006.36
                                   17          $390.72   $243,615.64
                                   18          $392.68   $243,222.96
                                   19          $394.64   $242,828.32
                                   20          $396.61   $242,431.71
21   $398.59   $242,033.12
22   $400.59   $241,632.53
23   $402.59   $241,229.94
24   $404.60   $240,825.33
25   $406.63   $240,418.71
26   $408.66   $240,010.05
27   $410.70   $239,599.34
28   $412.76   $239,186.59
29   $414.82   $238,771.77
30   $416.89   $238,354.87
31   $418.98   $237,935.89
32   $421.07   $237,514.82
33   $423.18   $237,091.64
34   $425.30   $236,666.34
35   $427.42   $236,238.92
36   $429.56   $235,809.36
37   $431.71   $235,377.66
38   $433.87   $234,943.79
39   $436.03   $234,507.76
40   $438.21   $234,069.54
41   $440.41   $233,629.14
42   $442.61   $233,186.53
43   $444.82   $232,741.71
44   $447.04   $232,294.66
45   $449.28   $231,845.38
46   $451.53   $231,393.85
47   $453.78   $230,940.07
48   $456.05   $230,484.02
49   $458.33   $230,025.68
50   $460.63   $229,565.06
51   $462.93   $229,102.13
52   $465.24   $228,636.89
53   $467.57   $228,169.32
54   $469.91   $227,699.41
55   $472.26   $227,227.16
56   $474.62   $226,752.54
57   $476.99   $226,275.55
58   $479.38   $225,796.17
59   $481.77   $225,314.40
60   $484.18   $224,830.22

								
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