FIN 500 SEU Financial Ratios and Basics of Time Value of Money Excel Worksheet
Subject
Business Finance
Course
FIN 500
School
Saudi electronic university
Department
FIN
Question Description
Module 4 Critical Thinking Assignment:
Financial Ratios and Basics of Time Value of Money (TVM)
*Complete the problems from Module 3 and Module 4 in an Excel spreadsheet. Be sure to show your work to receive credit; no hard keys.
Problem 4-1: Compound Interest
To what amount will the following investments accumulate?
a. 4,500 SAR invested for 8 years at 10% compounded annually
b. 10,000 SAR invested for 10 years at 10% compounded annually
c. 8,000 SAR invested for 7 years at 12% compounded annually
d. 20,000 SAR invested for 6 years at 5% compounded annually
Problem 4-2: Future value calculations
You are hoping to purchase a house in the future and recently received an inheritance of 100,000 SAR.
You like to use your inheritance for a down payment for the house.
a. If you use your inheritance in an account that generates 6% returns compounded annually, how many years will it take before your money grows to 750,000SAR?
b. If you let your money grow for 15 years at 8%, how much will you have in your account?
Problem 4-3: Present value calculations