# What Is a Value

Document Sample

```					Time Value on Excel (Using the Function (fx) Wizard)
note: click on the cell next to the question mark to see the formula.

Future Value:
If I deposit \$100 in an account earning 10% per year, how much will my
deposit be worth after 5 years?

PV             \$    (100.00)
I                    10.00%
n                          5
FV?                 \$161.05

What if we had the same problem but interest is compounded monthly?

PV             \$    (100.00)
I                     0.83%
n                         60
FV?                 \$164.53

***Note: Change the values of any variable other than that being solved for to view changes***
Time Value on Excel (Using the Function (fx) Wizard)
note: click on the cell next to the question mark to see the formula.

Present Value:
How much would I need to deposit today in an account earning 10% per year
in order to accumulate \$10,000 after 5 years?

FV             \$(10,000.00)
I                   10.00%
n                         5
PV?              \$6,209.21

What if my interest was compounded monthly?

FV             \$(10,000.00)
I                    0.83%
n                        60
PV?              \$6,077.89

***Note: Change the values of any variable other than that being solved for to view changes***
Time Value on Excel (Using the Function (fx) Wizard)
note: click on the cell next to the question mark to see the formula.

Future Value of an Annuity:
How much would I have in my retirement account if I deposited \$2000 each
year for 35 years and I earned 10% on my savings? What about \$4,000?

PMT            \$ (2,000.00)                  PMT           \$        (4,000.00)
I                   10.00%                   I                         10.00%
n                        35                  n                              35
FVA?           \$542,048.74                   FVA?               \$1,084,097.47

PMT            \$   (166.67)                  PMT           \$          (333.33)
I                    0.83%                   I                          0.83%
n                       420                  n                             420
FVA?           \$632,785.66                   FVA?               \$1,238,851.38

***Note: Change the values of any variable other than that being solved for to view changes***
Time Value on Excel (Using the Function (fx) Wizard)
note: click on the cell next to the question mark to see the formula.

Future Value of an Annuity Due:
How much would I have in my retirement account if I deposited \$2000 at the beginning of each
year for 35 years and I earned 10% on my savings? What about \$4,000?

PMT                   \$     (2,000.00)                       PMT            \$   (4,000.00)
I                              10.00%                        I                     10.00%
n                                   35                       n                          35
FVA?                      \$542,048.74                        FVA?           \$1,084,097.47

Instead, what if I made beginning of the month deposits of \$166.67? How about monthly deposits of \$333.33?

PMT                   \$       (166.67)                       PMT            \$     (333.33)
I                               0.83%                        I                      0.83%
n                                  420                       n                         420
FVA?                      \$632,785.66                        FVA?           \$1,238,851.38

***Note: Change the values of any variable other than that being solved for to view changes***
posits of \$333.33?
Time Value on Excel (Using the Function (fx) Wizard)
note: click on the cell next to the question mark to see the formula.

Present Value of an Annuity:
How much could I afford to borrow for a home if I can make monthly payments of \$12,000
per year for 30 years at 8%? What about monthly payment of \$1,000?

PMT            \$      12,000.00                 PMT         \$       1,000.00
I                         8.00%                 I                      0.67%
n                             30                n                         360
PVA?               (\$135,093.40)                PVA?            (\$136,283.49)

What if I wanted to know what my montlhy payments would be a \$20,000 car loan over
five years at 8%?

PV             \$      20,000.00
I                         0.67%
n                             60
PVA?                   (\$405.53)

***Note: Change the values of any variable other than that being solved for to view changes***
Time Value on Excel (Using the Function (fx) Wizard)
note: click on the cell next to the question mark to see the formula.

Present Value of an Annuity:
How much could I afford to borrow for a home if I can make annual payments of \$12,000
per year for 30 years at 8%? What about monthly payment of \$1,000?

PMT                  \$      12,000.00                     PMT                \$       1,000.00
I                               8.00%                     I                             0.67%
n                                   30                    n                                360
PVA?                     (\$135,093.40)                    PVA?                   (\$136,283.49)

What if I wanted to know what my montlhy payments would be a \$20,000 car loan over
five years at 8%?

PV                   \$      20,000.00
I                               0.67%
n                                   60
PVA?                         (\$405.53)