Exploring Annuities with Microsoft Excel 1. Objectives: To organize data and perform calculations using Microsoft Excel o To find future values for an annuity To determine payment amounts for an annuity given a set goal o To analyze the effect of time o To research reasonable annuity rates and investment amounts for use in the above calculations II. Procedure: Sheet 1- Future Value 1. Open a new Microsoft Excel (or Google Sheets) blank spreadsheet. 2. At the bottom of the page, it will show "Sheet 1". You can rename it "Future Value". a. Right click the "Sheet 1" tab and you will see an option to rename it. 3. Type "Payment Amount (P)" in cell A1. 4. Type "Rate (i)" in cell B1. 5. Type "Number of Payments per year (n)" in cell C1. 6. Type "Years (t)" in cell D1. Now the research.. You need to investigate reasonable annuity rates for our current market. You can choose a rate of your own using the information you find. Also, I want you to find out what investors suggest your payment amount should be. Remember, with bills to pay and a limited income you will be restricted to a realistic payment amount. Lastly, think about how long you want to invest your money for. If this annuity is going to be your retirement fund, you want that money to grow for as long as it can. 7. Enter the values that you get from your research in Row 2 for their respective columns. a. Rate should be expressed as a decimal 8. Туре Value (FV)" in cell F1. Now you're going to enter the command, which calculates Future Value. Remember: FV = P*((1+(r/n))^(n*t)-1)/(r/n) 9. In cell F2, input "=A2*((1+(B2/C2))^(C2*D2)-1)/(B2/C2)". Hit Enter. This gives you your Future Value. *You have to be very careful with this syntax because any mistype could give you an Error or incorrect value.
Exploring Annuities with Microsoft Excel 1. Objectives: To organize data and perform calculations using Microsoft Excel o To find future values for an annuity To determine payment amounts for an annuity given a set goal o To analyze the effect of time o To research reasonable annuity rates and investment amounts for use in the above calculations II. Procedure: Sheet 1- Future Value 1. Open a new Microsoft Excel (or Google Sheets) blank spreadsheet. 2. At the bottom of the page, it will show "Sheet 1". You can rename it "Future Value". a. Right click the "Sheet 1" tab and you will see an option to rename it. 3. Type "Payment Amount (P)" in cell A1. 4. Type "Rate (i)" in cell B1. 5. Type "Number of Payments per year (n)" in cell C1. 6. Type "Years (t)" in cell D1. Now the research.. You need to investigate reasonable annuity rates for our current market. You can choose a rate of your own using the information you find. Also, I want you to find out what investors suggest your payment amount should be. Remember, with bills to pay and a limited income you will be restricted to a realistic payment amount. Lastly, think about how long you want to invest your money for. If this annuity is going to be your retirement fund, you want that money to grow for as long as it can. 7. Enter the values that you get from your research in Row 2 for their respective columns. a. Rate should be expressed as a decimal 8. Туре Value (FV)" in cell F1. Now you're going to enter the command, which calculates Future Value. Remember: FV = P*((1+(r/n))^(n*t)-1)/(r/n) 9. In cell F2, input "=A2*((1+(B2/C2))^(C2*D2)-1)/(B2/C2)". Hit Enter. This gives you your Future Value. *You have to be very careful with this syntax because any mistype could give you an Error or incorrect value.
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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![**Exploring Annuities with Microsoft Excel**
**I. Objectives:**
- To organize data and perform calculations using Microsoft Excel
- To find future values for an annuity
- To determine payment amounts for an annuity given a set goal
- To analyze the effect of time
- To research reasonable annuity rates and investment amounts for use in the above calculations
**II. Procedure:**
**Sheet 1 - Future Value**
1. Open a new Microsoft Excel (or Google Sheets) blank spreadsheet.
2. At the bottom of the page, it will show “Sheet 1”. You can rename it “Future Value”.
a. Right click the “Sheet 1” tab and you will see an option to rename it.
3. Type “Payment Amount (P)” in cell A1.
4. Type “Rate (i)” in cell B1.
5. Type “Number of Payments per year (n)” in cell C1.
6. Type “Years (t)” in cell D1.
**Now the research……**
You need to investigate reasonable annuity rates for our current market. You can choose a rate of your own using the information you find. Also, I want you to find out what investors suggest your payment amount should be. Remember, with bills to pay and a limited income you will be restricted to a realistic payment amount. Lastly, think about how long you want to invest your money for. If this annuity is going to be your retirement fund, you want that money to grow for as long as it can.
7. Enter the values that you get from your research in Row 2 for their respective columns.
a. Rate should be expressed as a decimal
8. Type “Future Value (FV)” in cell F1.
**Now you’re going to enter the command, which calculates Future Value. Remember:**
\[ FV = P \times ((1+(r/n))^{(n \times t)}-1)/(r/n) \]
9. In cell F2, input “=A2*((1+(B2/C2))^(C2*D2)-1)/(B2/C2)”. Hit Enter. This gives you your Future Value.
*You have to be very careful with this syntax because any mistype could give you an Error or incorrect value.*](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0f725b05-6985-474e-a031-937034e54c0f%2F61efa0af-d151-40b7-a9c7-7cff3fbf9097%2Fytk2dw7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Exploring Annuities with Microsoft Excel**
**I. Objectives:**
- To organize data and perform calculations using Microsoft Excel
- To find future values for an annuity
- To determine payment amounts for an annuity given a set goal
- To analyze the effect of time
- To research reasonable annuity rates and investment amounts for use in the above calculations
**II. Procedure:**
**Sheet 1 - Future Value**
1. Open a new Microsoft Excel (or Google Sheets) blank spreadsheet.
2. At the bottom of the page, it will show “Sheet 1”. You can rename it “Future Value”.
a. Right click the “Sheet 1” tab and you will see an option to rename it.
3. Type “Payment Amount (P)” in cell A1.
4. Type “Rate (i)” in cell B1.
5. Type “Number of Payments per year (n)” in cell C1.
6. Type “Years (t)” in cell D1.
**Now the research……**
You need to investigate reasonable annuity rates for our current market. You can choose a rate of your own using the information you find. Also, I want you to find out what investors suggest your payment amount should be. Remember, with bills to pay and a limited income you will be restricted to a realistic payment amount. Lastly, think about how long you want to invest your money for. If this annuity is going to be your retirement fund, you want that money to grow for as long as it can.
7. Enter the values that you get from your research in Row 2 for their respective columns.
a. Rate should be expressed as a decimal
8. Type “Future Value (FV)” in cell F1.
**Now you’re going to enter the command, which calculates Future Value. Remember:**
\[ FV = P \times ((1+(r/n))^{(n \times t)}-1)/(r/n) \]
9. In cell F2, input “=A2*((1+(B2/C2))^(C2*D2)-1)/(B2/C2)”. Hit Enter. This gives you your Future Value.
*You have to be very careful with this syntax because any mistype could give you an Error or incorrect value.*
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