a. We sometimes need to find how long it will take a sum of money to grow to som

Question

a. We sometimes need to find how long it will take a sum of money to grow to some specified amount. For example, if a company's sales are growing at a rate of 13.25% per year, how long will it take sales to double? NPER = b. If you want an investment to double in 5 years, what annual interest rate must it earn? Rate = c. What is the future value of $2,250 after 8 years under 13.25% annual compounding? FV = What is the FV with semiannual compounding? FV = What is the FV with quarterly compounding? FV = What is the FV with monthly compounding? FV = What is the FV with daily compounding? FV = d. What would the required payment be on a $20,000 loan that is to be repaid in 5 equal installments at the end of each of the next 5 years if the interest rate is 7.50%? PMT = a. We sometimes need to find how long it will take a sum of money to grow to some specified amount. For example, if a company's sales are growing at a rate of 13.25% per year, how long will it take sales to double? NPER = b. If you want an investment to double in 5 years, what annual interest rate must it earn? Rate = c. What is the future value of $2,250 after 8 years under 13.25% annual compounding? FV = What is the FV with semiannual compounding? FV = What is the FV with quarterly compounding? FV = What is the FV with monthly compounding? FV = What is the FV with daily compounding? FV = d. What would the required payment be on a $20,000 loan that is to be repaid in 5 equal installments at the end of each of the next 5 years if the interest rate is 7.50%? PMT =

Explanation / Answer

a) NPER              5.57 =NPER(13.25%,,-100,200) years b) RATE 14.87% =RATE(5,,-100,200) c) FV - Annual $ 6,088.19 =FV(13.25%,8,,-2250) FV - Semi-annual $ 6,279.53 =FV(13.25%/2,8*2,,-2250) FV - Quarterly $ 6,383.73 =FV(13.25%/4,8*4,,-2250) FV - Monthly $ 6,456.72 =FV(13.25%/12,8*12,,-2250) FV - Daily $ 6,493.09 =FV(13.25%/365,8*365,,-2250) d) PMT $ 4,943.29 =PMT(7.5%,5,-20000)

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