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How do we get RM24996.499 from the solution photo given for Present Value?

How do we get RM24996.499 from the solution photo given for Present Value?

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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How do we get RM24996.499 from the solution photo given for Present Value?
3. The Stein family wants to buy a small vacation house in a year and a half. They expect it to cost RM75,000 at that time. They have the following sources of money They currently have RM10,000 in a bank account that pays 6% compounded monthly. Uncle Murray has promised to give them RM1,000 a month for 18 months starting today and they save it in a bank account that pays 6% compounded monthly. At the time of purchase, they'll take out a mortgage. They anticipate being able to make payments of about RM300 a month on a 15-year, 12% loan. In addition, they plan to make quarterly deposits to an investment account to save up any shortfall in the amount required. How much must those additions be if the investment account pays 8% compounded quarterly?
Transcribed Image Text:3. The Stein family wants to buy a small vacation house in a year and a half. They expect it to cost RM75,000 at that time. They have the following sources of money They currently have RM10,000 in a bank account that pays 6% compounded monthly. Uncle Murray has promised to give them RM1,000 a month for 18 months starting today and they save it in a bank account that pays 6% compounded monthly. At the time of purchase, they'll take out a mortgage. They anticipate being able to make payments of about RM300 a month on a 15-year, 12% loan. In addition, they plan to make quarterly deposits to an investment account to save up any shortfall in the amount required. How much must those additions be if the investment account pays 8% compounded quarterly?
Step4 d) 3) making payment - $RM300 time = 15 YEARS = 15 *12 = 180 periods interest rate = 12% = 12/12 =1% = 0.01 by calculating in the excel format we get present value need to calculate by excel, below is the calculation = PV(rate, nper, pmt, fv,type) = PV(0.01, 180, 300, 0, 0) PV = $24996.499
Transcribed Image Text:Step4 d) 3) making payment - $RM300 time = 15 YEARS = 15 *12 = 180 periods interest rate = 12% = 12/12 =1% = 0.01 by calculating in the excel format we get present value need to calculate by excel, below is the calculation = PV(rate, nper, pmt, fv,type) = PV(0.01, 180, 300, 0, 0) PV = $24996.499
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