PLEASE ANSWER QUESTIONS 10.4, 10.5, 10.6, 10.7, AND 10.8 USING EXCEL AND EXCEL F
ID: 3123576 • Letter: P
Question
PLEASE ANSWER QUESTIONS 10.4, 10.5, 10.6, 10.7, AND 10.8 USING EXCEL AND EXCEL FORMULAS.
What sum would be available in seven years' time if pound 3250 is invested now with a compound interest rate of 11% per annum (use Equation (10.4) and Excel FV function)? What compound annual interest rate would cause pound 3, 265 to grow to pound 5, 776 in six years' time (use Equation (10.4) and Excel RATE function)? Find the effective rate of interest which is equivalent to the following nominal rates (use Equation (10.6) and Excel function Effect): (a) 16% compounded half-annually. (b) 16% compounded quarterly (c) 16% compounded monthly (d) 16% compounded daily (1 year = 365 days) Find the nominal rate, j, compounded monthly equivalent to 16% compounded semi-annually. At what nominal rate compounded monthly will pound 2000 amount to pound 4650 in six years time use Equation (10 A) Excel RATE function)?Explanation / Answer
Solution:
10.4
Syntax
FV(rate,nper,pmt,[pv],[type])
Here
rate = rate of interest 11% = 0.11
nper = total number of period = 7 year
pmt = payment at each period = 0
pv = present value = 3250
type = we can omit it here
therefore formula
FV(0.11,7,0,3250)
Answer:
10.5
Syntax
RATE(nper, pmt, pv, [fv], [type], [guess])
above can be written as
RATE(nper, pmt, pv, [fv])
here time = nper = 6 year
and FV = 5776
and PV = 3250
and pmt = 0
RATE(6,0,3250,5776)
10.6
EFFECT( nominal_rate, npery )
nominal_rate= The nominal interest rate
npery = The number of compounding periods per year
therefore
(a) 16% compunded half - annually
EFFECT( 16%, 2 )
(b)
EFFECT( 16%, 4 )
(c)
EFFECT( 16%, 12 )
(d)
EFFECT( 16% , 365 )
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.