Instructions for the Microsoft Excel Templates

Be advised, the worksheet and workbooks are not protected.

Extensive detail and information is contained within the manual. Striking the "F1" key or following the path "Windows>Excel Help" will invoke the Office Assistant and bring up one of several help menus. You should enter your name, course ID, and date name into the cells at the top of the page. Each page contains a page footer with a Page # of Page ## as well as time and date to assist in assembly of multiple pages. Each worksheet contains the identification of the problem or exercise. All formatting should have been accomplished to provide satisfactory presentation. See the text for additional assistance in formatting. There should be no need to insert columns or rows into the workbooks. If more than one page is required by the problem, the page breaks are preset. In general, the yellow highlighted cells are the cells which work and effort should be presented. Place the proper account title in the cell where the word "Account title" appears on the template. Place the value in the cell where the word "Value" or "Amount" appears on the template. A formula may be placed in some of these cells. Write a formula into cells where the word "Formula" appears. In these cells, an amount calculated can be entered. An amount can be placed in these cells. Place the explanation for the entry in the cell where the word "Text Explanation" appears on the template. Insert the account number where "Acct Nbr" appears on the template during posting. Insert the journal reference where "JOURN #" appears on the template during posting. Insert the title in the cell where "TITLE" appears on the template. The print area is defined to fit onto 8 1/2" X 11" sheets in portrait or landscape mode as required. The gray filled cells define the perimeter of the problem and the print area. The problem is formatted for whole dollars with comma separations (no cents) except where required. The display may have "Freeze Pane" invoked so column titles remain visible during data entry. Negative values may be shown as ($400) or -$400.

Consider using "Split" panes to assist in copy and paste of data. Much of the exercises and problems can have data entered by the "look to" or "=A34" type formula where cell A34 contains the data to be entered. This precludes typing and data entry errors.

Chapter 6 Homework Time Value of Money Problems

Enter your name here Tamara Smith

Using the appropriate interest table or Excel formula or financial calculator, provide the solution to each of the following questions. Place your answer and your explanation of how it was derived in the space provided in order to receive full credit. For your explanation provide either a formula similar to the textbook approach or an excel formula or provide the keys your pressed on the financial calculator.

1 How much should Elton John invest at the end of each year for six years if he expects to earn 8 % and he wants to accumulate $150,000 for a new grand piano six years from today. Answer: Explanation: $ 20,447

150,000=R (1+.08)6 - 1 150,000= R(7.33592904) 150,000/7.33592904= R R=$ 20,447

2 How much should Elton John invest today if he expects to earn 8 % and he wants to accumulate $150,000 for a new grand piano six years from today. Answer: Explanation: $ 94,525

FV= 150,000(1/1+.08)6 FV= 150,000(.63017) FV=$ 94,525.44

3 How much much Elton John invest today if he expects to earn 8 % compounded semiannually and he wants to accumulate $150,000 for a new grand piano six years from today. Answer: Explanation: $ 7,904

150,000=R (1+.08)12 - 1 150,000= R(18.97713) 150,000/18.97713= R R=$ 20,447

4 Frances is depositing $4,095 at the end of each year in a fund that earns 10%. In how many years will the fund be at $25,000? Answer: Explanation: 19 I divided 25,000/4095 and got 6.1050. Used Table 6-1 and looked it up under the 10% column.

5 Nancy is investing $300,000 in a fund that earns 6% interest compounded annually. What equal amount can Nancy withdraw at the end of each of the next 7 years? Answer: Explanation:

6 Vagabond, Inc. issues $800,000 of 9% bonds due in 20 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 8%. What amount will Vagabond receive when it issues the bonds. Answer: Explanation:

7 Elizabeth Taylor will receive $200,000 five years from now from a trust fund established by one of her many husbands. Assuming the appropriate interest rate for discounting is 8 percent compounded quarterly, what is the present value of this amount today? Answer: Explanation: 200,000=R (1+.08)20 - 1 200,000= R(3.66095714) 200,000/3.66095714= R R=$ 54630.52