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How much would you have to invest today to receive $50,000 in 10 years at 9.5 percent per year? FV N Interest PV years per year =PV(rate, nper, pmt, fv)

How much would you have to invest today to receive $50,000 in 10 years at 9.5 percent per year? FV N Interest PV years per year =PV(rate, nper, pmt, fv)

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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**Investment Calculation** To determine how much you need to invest today to receive $50,000 in 10 years at an annual interest rate of 9.5%, follow the setup below: - **FV (Future Value):** An empty cell for calculation, indicating the target future value of $50,000. - **N (Number of years):** An empty cell, corresponding to the investment period of 10 years. - **Interest (Interest rate per year):** An empty cell, representing the annual interest rate of 9.5%. **Formula Explanation:** - **PV (Present Value):** An empty cell where you'll determine the present value using the following formula: - `=PV(rate, nper, pmt, fv)` This formula calculates the present value of an investment, given the rate, number of periods (nper), payment per period (pmt, which is 0 in this case since we're dealing with a single future sum), and the future value (fv). **Note:** Input the interest rate as a decimal (0.095) when using the formula.
Transcribed Image Text:**Investment Calculation** To determine how much you need to invest today to receive $50,000 in 10 years at an annual interest rate of 9.5%, follow the setup below: - **FV (Future Value):** An empty cell for calculation, indicating the target future value of $50,000. - **N (Number of years):** An empty cell, corresponding to the investment period of 10 years. - **Interest (Interest rate per year):** An empty cell, representing the annual interest rate of 9.5%. **Formula Explanation:** - **PV (Present Value):** An empty cell where you'll determine the present value using the following formula: - `=PV(rate, nper, pmt, fv)` This formula calculates the present value of an investment, given the rate, number of periods (nper), payment per period (pmt, which is 0 in this case since we're dealing with a single future sum), and the future value (fv). **Note:** Input the interest rate as a decimal (0.095) when using the formula.
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