2. Using the formula which is attached below, calculate the Future Value of disposable amount of money (5 000 CZK), if you can expect to earn 5% interest compounded annually on that money for the next two years. Prior to calculation fill in the table gaps. manually using TVM functions Principal Interest rate Time period Compounding frequency Total number of compounding periods Future value of money Future value of money (EUR) (as a decimal) (number of years) (times per year) (EUR) (EUR) 5,000 0.05 2 1 2 5,512.50 5,512,50
2. Using the formula which is attached below, calculate the Future Value of disposable amount of money (5 000 CZK), if you can expect to earn 5% interest compounded annually on that money for the next two years. Prior to calculation fill in the table gaps. manually using TVM functions Principal Interest rate Time period Compounding frequency Total number of compounding periods Future value of money Future value of money (EUR) (as a decimal) (number of years) (times per year) (EUR) (EUR) 5,000 0.05 2 1 2 5,512.50 5,512,50
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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2. Using the formula which is attached below, calculate the
| manually | using TVM functions | |||||
| Principal | Interest rate | Time period | Compounding frequency | Total number of compounding periods | Future value of money | Future value of money |
| (EUR) | (as a decimal) | (number of years) | (times per year) | (EUR) | (EUR) | |
| 5,000 | 0.05 | 2 | 1 | 2 | 5,512.50 | 5,512,50 |
Transcribed Image Text:r nt
FV = PV ( 1+-
n-
pr(1+)"
where PV – money invested today (in currency units),
r - annual Interest rate (in decimal form),
n – number of compounding periods per year,
t – number of years interest is applied.
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