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Can you provide the excel formula that can used to caculate the attached using an excel spread sheet?  I have attempted this on my excel and come up something completely different.

Can you provide the excel formula that can used to caculate the attached using an excel spread sheet?  I have attempted this on my excel and come up something completely different.

Essentials Of Investments
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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Can you provide the excel formula that can used to caculate the attached using an excel spread sheet?  I have attempted this on my excel and come up something completely different.

Step 1 Analysis We need to use future value annuity formula to get value after 10 years. (1+i)" –1 Future value = PMT| Where PMT =Periodic payment i= Periodic rate of interest n= Number of payments Step 2 Calculation of future value Since payment is due quarterly we need to divide interest rate by 4 and multiply time by 4 to get periodic interest rate and number of payments payments. Quarterly payment(PMT) =$500 Periodic rate of interest(i) =8%/4 =2% =0.02 Number of payments =10*4 =40 = $500| (1+0.02)40 0.02 2.2080396636–1 = $500 0.02 1.2080396636 = $500 0.02 = $500 * 60. 401983318 = $30, 201 Hence value after 10 years is $30,201
Transcribed Image Text:Step 1 Analysis We need to use future value annuity formula to get value after 10 years. (1+i)" –1 Future value = PMT| Where PMT =Periodic payment i= Periodic rate of interest n= Number of payments Step 2 Calculation of future value Since payment is due quarterly we need to divide interest rate by 4 and multiply time by 4 to get periodic interest rate and number of payments payments. Quarterly payment(PMT) =$500 Periodic rate of interest(i) =8%/4 =2% =0.02 Number of payments =10*4 =40 = $500| (1+0.02)40 0.02 2.2080396636–1 = $500 0.02 1.2080396636 = $500 0.02 = $500 * 60. 401983318 = $30, 201 Hence value after 10 years is $30,201
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