Mini Lesson: Compound Interest
|
|
|
- Britney Simpson
- 7 years ago
- Views:
Transcription
1 Mini Lesson: Compound Interest Revised August 2016 Requires Simple Interest Project as Prerequisite As mentioned in the previous project, interest is the payment you make for using someone else's money or the payment you receive for lending money. Simple interest is equal to a percentage of the amount of money borrowed or loaned. To compute (simple) interest, you need to know the following: Principal = the amount of money borrowed or loaned Rate = the percentage charged to borrow or loan; normally expressed on an annual basis Time = the period of time the money is borrowed or loaned Simple interest can be calculated with the following formula: Interest = Principal * Rate * Time, abbreviated as I = P * R * T As you have previously learned, the principal plus the interest (called the Maturity Value or Value of the Investment) is calculated using the formula below: Maturity Value = P*(1 + (R * T)) Compound interest is a different case; it is where money builds on itself, that is, it is calculated on the principal and the interest earned in prior periods. Computing compound interest is more complicated than computing simple interest because interest will be computed on a new amount each period. The compound amount (or new principal) is the sum of the original principal and its compound interest for that period. The interest period is the time (daily, monthly, quarterly, semiannually or annually) for which interest has been computed. The interest rate is normally quoted on an annual basis (APR) so if interest is computed for a different time period, you must convert the annual interest rate. For example, an 8% APR compounded monthly results in 12 interest payments per year with interest each month equal to 1/12 th of 8%, or about 0.67% per month. To compute compound interest, you will need to know the following: The amount of money on deposit (the balance) The interest rate applied (sometimes called the stated rate of interest) The frequency of compounding (annually, semiannually, quarterly, monthly, daily) Compound interest can be calculated with the same formula as used for simple interest: Interest = Principal * Rate * Time, abbreviated as I = P * R * T However, the formula to calculate Maturity Value when compound interest is applied changes. It is calculated using the formula below, where N = number of time periods. Maturity Value = P * (1 + R) N Compound Interest Part I Directions 1
2 Click on the tab with the worksheet titled Activity 1 to begin. Activity 1: Compute Compound Interest and Compound Value Compounded Annually (using a constant in the formula) Suppose Henry makes an investment of $1000 with an annual interest rate (APR) of 3.5% that is compounded annually for 5 years. What will the value of Henry s investment be by the end of these 5 interest periods? a. Copy the worksheet titled Activity 1 into a new worksheet and title it "Activity 1 Solution." c. Enter periods 1-5 in Cells B8:B12. d. Type in the amount of the investment (Original Principal) into cell D4. e. Set cell C8 equal to the contents of cell D4. f. Enter formula into cell D8 to compute the Interest for the Period. Create the formula using a constant value for the Interest Rate and a relative cell reference to the Compound Amount. g. Use the Fill Handle to copy the formula from cell D8 to cells D9:D12. h. Enter a formula into cell E8 that will result in the New Compound Amount. New Compound Amount = Compound Amount + Interest for the Period. i. Use the Fill Handle to copy the formula from cell E8 to cells E9:E12. j. Set cell C9 equal to cell E8. k. Use the Fill Handle to copy the formula from cell D9 to cells D10:D12. l. Format cells F8:F12 to TEXT. m. Select cell F8 and write the algebraic expression (number formula) that will compute the New formula. Repeat for cells F9:F12. Refer to Compound Interest formula in the Mini Lesson and use ^ to indicate exponent. n. Using the same formula as the algebraic expression from the previous step, enter those numbers for cells G8:G12 that will compute the Value of Investment after interest has been earned for this period. Use constant values not relative cell references in the formulas. Hint: the values of G8:G12 should be identical to the values of E8:E12. o. Format cells C8:C12, D4, D8:D12, E8:E12, and G8:G12 to Currency with 2 decimal places, comma p. Format shading of the column headings in cell areas B7:G7 to Light Purple. q. Change cells B7:G7 to Bold Font. r. Format the table with All Borders and use Thick Borders to surround the outside of the table and s. Center align cells B8:B12. t. Save file as Compound Interest Part I XX, where XX are your initials. u. Click on the tab for the worksheet titled Activity 2 to continue. Compound Interest Part I Directions 2
3 Activity 2: Compute Compound Interest Compounded Annually (using an absolute cell reference in the formula) Now suppose Hillary makes an investment of $1000 at a bank that offers an APR of 5.25% compounded annually for 10 periods. What will the value of Hillary s investment be at the end of these 10 investment periods? a. Copy the worksheet titled Activity 2 into a new worksheet and title it "Activity 2 Solution. c. Type the given interest rate into Cell D5. Format the cell to Currency with 2 decimal places and the % symbol. d. Type in 1 in cell B8 and 2 in cell B9, then use the Auto Fill feature to enter the rest of the interest periods to cells B10:B17. e. Type the original investment amount (the principal) into cell D4. f. Set cell C8 equal to the contents of cell D4. g. Enter formula to calculate Interest for the Period in cells D8:D17 using a relative cell reference to the Compound Amount and an absolute cell reference to the Annual Interest Rate in cell D5. h. Use the Fill Handle to copy the formula from cell D8 to cells D9:D17. i. Enter a formula in cell E8 to calculate the New Compound Amount using relative cell references to the Compound Amount and the Interest for the Period. j. Use the Fill Handle to copy the formula from cell E8 to cells E9:E17. k. Set cell C9 equal to the value of cell E8. l. Use the Fill Handle to copy the formula from cell C9 to cells C10:C17. m. Format cells F8:F17 to TEXT. n. Select cell F8 and write the algebraic expression (number formula) that will compute the New formula. Repeat for cells F9:F17. o. Enter a formula in cell G8 that will compute the Value of Investment after interest has been earned for this period. Use an absolute cell reference for both the compound amount and the interest rate and use a relative cell reference to refer to the interest period. Hint: the values of G8:G17 should be identical to the values of E8:E17. p. Use the Fill Handle to copy the formula from cell G8 to cells G9:G17. q. Format cells C8:C17, D8:D17, E8:E17, and G8:G17 to Currency with 2 decimal places, comma r. Format the shading of cell areas B7:G7 to Light Purple. s. Change cells B7-G7 to Bold Font. t. Format the table with All Borders and use Thick Borders to surround the outside of the table and u. Center align cells B8:B17. v. Save file. w. Click on the tab for the worksheet titled Activity 2 to continue. Compound Interest Part I Directions 3
4 Activity 3: Compute Compound Interest with Different Compounding Frequency While Hillary was shopping for various investment opportunities, she found 2 banks that offered the same interest rate, but different compounding frequencies. Friendly Bank is offering 5.25% APR, compounded semi-annually and Happy Bank is offering 5.25% APR, compounded quarterly. Hillary is curious to see what difference, if any, the compounding frequency will have on the value of her investment. Calculate the value of a $1000 earning 5.25% APR invested for 10 years under different compounding frequencies. After you have determined the value of the investment for both banks after 10 years, decide which bank Hilary should invest in to reap the highest earnings. a. Copy the worksheet titled Activity 3 into a new worksheet and title it "Activity 3 Solution. c. Enter a formula into cell F5 to compute the period (semi-annual) interest rate. Period Interest Rate = APR/# of times compounded in a year. Use a relative cell reference to link the APR (located in cell D5) for your formula. Format the cell to Percentage with 3 decimal places and the % symbol. d. Type in 1 in cell B8 and 2 in cell B9, then use the Auto Fill feature that will allow the rest of the interest periods to appear in cells B10:B27. e. Type the original principal amount in cell D4. f. Set cell C8 equal to cell D4. g. Enter formula to calculate Interest for the Period in cells D8:D27 using a relative cell reference to the Compound Amount and an absolute cell reference to the Period Interest Rate, (which was calculated earlier in cell F5). h. Copy the formula from cell D8 to cells D9:D27. i. Enter a formula in cell E8 to calculate the New Compound Amount. j. Copy the formula from cell E8 to cells E9:E27. k. Set cell C9 equal to the contents of E8. l. Use the Fill Handle to copy the contents of cell C9 to cells C10:C27. m. Format cells F8:F27 to TEXT. n. Select cell F8 and write the algebraic expression (number formula) that will compute the New formula. Instead of manually typing each algebraic expression, Drag and Drop the contents of cell F8 to cells F9:F27. o. Enter a formula in cell G8 that will compute the Value of Investment after interest has been earned for this period. Use an absolute cell reference for both the Compound Amount and the Interest Rate and use a relative cell reference to refer to the Interest Period. Hint: the result of the formula should be equal to the value in cell E8 p. Use the Fill Handle to copy the formula from from cell G8 to cells G9:G27. q. Format cells C8:C27, D4, D8:D27, E8:E27, and G8:G27 to Currency with 2 decimal places, comma r. Format the shading of cell areas B7:G7 to Light Purple. s. Change cells B7:G7 to Bold Font. Compound Interest Part I Directions 4
5 t. Format the table with All Borders and use Thick Borders to surround the outside of the table and u. Center align cells B8:B27. v. Repeat the same steps for the second table. Now there are 40 periods (10 years x compounding frequency). w. Change cells B27 and B74 to Bold Font. x. Insert a Comment in either cell B27 or B74 to indicate the bank that Hillary should invest in. y. Save file. Compound Interest Part I Directions 5
With compound interest you earn an additional $128.89 ($1628.89 - $1500).
Compound Interest Interest is the amount you receive for lending money (making an investment) or the fee you pay for borrowing money. Compound interest is interest that is calculated using both the principle
Excel Project 4. 1. From the Start menu select New Office Document. If necessary, click the General tab and then double-click Blank workbook.
Excel Project 4 Two of the more powerful aspects of Excel are its wide array of functions and its capability to organize answers to what-if questions. In earlier projects you were introduced to several
Directions: Follow the below steps to create a Shopping Budget Worksheet in Microsoft Excel.
Shopping Budget- Microsoft Excel 7 th grade Directions: Follow the below steps to create a Shopping Budget Worksheet in Microsoft Excel. Open Microsoft Excel from your desktop and save this new workbook
MS Excel. Handout: Level 2. elearning Department. Copyright 2016 CMS e-learning Department. All Rights Reserved. Page 1 of 11
MS Excel Handout: Level 2 elearning Department 2016 Page 1 of 11 Contents Excel Environment:... 3 To create a new blank workbook:...3 To insert text:...4 Cell addresses:...4 To save the workbook:... 5
5.1 Simple and Compound Interest
5.1 Simple and Compound Interest Question 1: What is simple interest? Question 2: What is compound interest? Question 3: What is an effective interest rate? Question 4: What is continuous compound interest?
Lab 11: Budgeting with Excel
Lab 11: Budgeting with Excel This lab exercise will have you track credit card bills over a period of three months. You will determine those months in which a budget was met for various categories. You
ROUND(cell or formula, 2)
There are many ways to set up an amortization table. This document shows how to set up five columns for the payment number, payment, interest, payment applied to the outstanding balance, and the outstanding
Understanding Start-Up Costs
Understanding Start-Up Costs One of the many tasks you have to do when you plan to start any business is to calculate the initial costs involved in starting and operating your business. Almost every business
MODELLING. IF...THEN Function EXCEL 2007. Wherever you see this symbol, make sure you remember to save your work!
MODELLING IF THEN IF...THEN Function EXCEL 2007 Wherever you see this symbol, make sure you remember to save your work! IF.Then Function Some functions do not calculate values but instead do logical tests
MICROSOFT EXCEL 2010. Formulas, Functions, & Macros. Documented by Vincent J. Yanusauskas Computer Training Coordinator
MICROSOFT EXCEL 2010 Formulas, Functions, & Macros Documented by Vincent J. Yanusauskas Computer Training Coordinator Introduction This handout was created to familiarize the user with the most common
Comparing Simple and Compound Interest
Comparing Simple and Compound Interest GRADE 11 In this lesson, students compare various savings and investment vehicles by calculating simple and compound interest. Prerequisite knowledge: Students should
Excel Level Two. Introduction. Contents. Exploring Formulas. Entering Formulas
Introduction Excel Level Two This workshop introduces you to formulas, functions, moving and copying data, using autofill, relative and absolute references, and formatting cells. Contents Introduction
$496. 80. Example If you can earn 6% interest, what lump sum must be deposited now so that its value will be $3500 after 9 months?
Simple Interest, Compound Interest, and Effective Yield Simple Interest The formula that gives the amount of simple interest (also known as add-on interest) owed on a Principal P (also known as present
Microsoft Excel Basics
COMMUNITY TECHNICAL SUPPORT Microsoft Excel Basics Introduction to Excel Click on the program icon in Launcher or the Microsoft Office Shortcut Bar. A worksheet is a grid, made up of columns, which are
Preparing a budget template and presenting financial graphs using Excel
Preparing a budget template and presenting financial graphs using Excel KLA: STAGE: UNIT: Topic: HSIE Stage 5 Commerce Personal Finance Budgeting, loans and insurance Outcomes: 5.1 Applies consumer, financial,
Linear Programming Refining Transportation
Solving a Refinery Problem with Excel Solver Type of Crude or Process Product A B C 1 C 2 D Demand Profits on Crudes 10 20 15 25 7 Products Product Slate for Crude or Process G 0.6 0.5 0.4 0.4 0.3 170
Excel Spreadsheet Activity Redo #1
Excel Spreadsheet Activity Redo #1 Melissa Ebling 11/9/06 Directions: Please follow all directions in this packet. This assignment will consist of your tracking ten different stocks over a period of a
MBA Quantitative Methods PC-Exercises Introductory Examples
MBA Quantitative Methods PC-Exercises Introductory Examples intro.xls intro_with_output.xls intro.doc For all Examples you need the file intro.xls. The file intro_with_output.xls is the file with the results
As in the example above, a Budget created on the computer typically has:
Activity Card Create a How will you ensure that your expenses do not exceed what you planned to invest or spend? You can create a budget to plan your expenditures and earnings. As a family, you can plan
How To Use Excel 4.4.2.2 On A Computer Or A Computer With A Cell Phone Or Cell Phone
M04_GASK8219_01_SE_C04E.qxd 6/30/10 7:53 AM Page 241 chapter 4 Excel 2010 Use Financial and Lookup Functions, Define Names, and Validate Data OUTCOMES At the end of this chapter you will be able to: PROJECT
Table of Contents TASK 1: DATA ANALYSIS TOOLPAK... 2 TASK 2: HISTOGRAMS... 5 TASK 3: ENTER MIDPOINT FORMULAS... 11
Table of Contents TASK 1: DATA ANALYSIS TOOLPAK... 2 TASK 2: HISTOGRAMS... 5 TASK 3: ENTER MIDPOINT FORMULAS... 11 TASK 4: ADD TOTAL LABEL AND FORMULA FOR FREQUENCY... 12 TASK 5: MODIFICATIONS TO THE HISTOGRAM...
Logarithmic and Exponential Equations
11.5 Logarithmic and Exponential Equations 11.5 OBJECTIVES 1. Solve a logarithmic equation 2. Solve an exponential equation 3. Solve an application involving an exponential equation Much of the importance
3. Time value of money. We will review some tools for discounting cash flows.
1 3. Time value of money We will review some tools for discounting cash flows. Simple interest 2 With simple interest, the amount earned each period is always the same: i = rp o where i = interest earned
Module 5: Interest concepts of future and present value
file:///f /Courses/2010-11/CGA/FA2/06course/m05intro.htm Module 5: Interest concepts of future and present value Overview In this module, you learn about the fundamental concepts of interest and present
Sample Table. Columns. Column 1 Column 2 Column 3 Row 1 Cell 1 Cell 2 Cell 3 Row 2 Cell 4 Cell 5 Cell 6 Row 3 Cell 7 Cell 8 Cell 9.
Working with Tables in Microsoft Word The purpose of this document is to lead you through the steps of creating, editing and deleting tables and parts of tables. This document follows a tutorial format
Excel 2007 A Beginners Guide
Excel 2007 A Beginners Guide Beginner Introduction The aim of this document is to introduce some basic techniques for using Excel to enter data, perform calculations and produce simple charts based on
Probability Distributions
CHAPTER 5 Probability Distributions CHAPTER OUTLINE 5.1 Probability Distribution of a Discrete Random Variable 5.2 Mean and Standard Deviation of a Probability Distribution 5.3 The Binomial Distribution
What is the difference between simple and compound interest and does it really matter?
Module gtf1 Simple Versus Compound Interest What is the difference between simple and compound interest and does it really matter? There are various methods for computing interest. Do you know what the
Finance Unit 8. Success Criteria. 1 U n i t 8 11U Date: Name: Tentative TEST date
1 U n i t 8 11U Date: Name: Finance Unit 8 Tentative TEST date Big idea/learning Goals In this unit you will study the applications of linear and exponential relations within financing. You will understand
EXCEL SPREADSHEET MANUAL
EXCEL SPREADSHEET MANUAL to accompany MATHEMATICS WITH APPLICATIONS, EIGHTH EDITION and MATHEMATICS WITH APPLICATIONS, FINITE VERSION, EIGHTH EDITION LIAL HUNGERFORD Paula Grafton Young Salem College J.
To launch the Microsoft Excel program, locate the Microsoft Excel icon, and double click.
EDIT202 Spreadsheet Lab Assignment Guidelines Getting Started 1. For this lab you will modify a sample spreadsheet file named Starter- Spreadsheet.xls which is available for download from the Spreadsheet
Module 5: Interest concepts of future and present value
Page 1 of 23 Module 5: Interest concepts of future and present value Overview In this module, you learn about the fundamental concepts of interest and present and future values, as well as ordinary annuities
Excel 2007 Basic knowledge
Ribbon menu The Ribbon menu system with tabs for various Excel commands. This Ribbon system replaces the traditional menus used with Excel 2003. Above the Ribbon in the upper-left corner is the Microsoft
Ch 3 Understanding money management
Ch 3 Understanding money management 1. nominal & effective interest rates 2. equivalence calculations using effective interest rates 3. debt management If payments occur more frequently than annual, how
To reuse a template that you ve recently used, click Recent Templates, click the template that you want, and then click Create.
What is Excel? Applies to: Excel 2010 Excel is a spreadsheet program in the Microsoft Office system. You can use Excel to create and format workbooks (a collection of spreadsheets) in order to analyze
Excel 2003 A Beginners Guide
Excel 2003 A Beginners Guide Beginner Introduction The aim of this document is to introduce some basic techniques for using Excel to enter data, perform calculations and produce simple charts based on
Q&As: Microsoft Excel 2013: Chapter 2
Q&As: Microsoft Excel 2013: Chapter 2 In Step 5, why did the date that was entered change from 4/5/10 to 4/5/2010? When Excel recognizes that you entered a date in mm/dd/yy format, it automatically formats
How To Use Excel To Compute Compound Interest
Excel has several built in functions for working with compound interest and annuities. To use these functions, we ll start with a standard Excel worksheet. This worksheet contains the variables used throughout
Credit Card Loans. Student Worksheet
Student Worksheet Credit Card Loans Name: Recall the formula for simple interest where, I is the interest owed P is the principal amount outstanding r is the interest rate t is the time in years. Note:
ECDL. European Computer Driving Licence. Spreadsheet Software BCS ITQ Level 2. Syllabus Version 5.0
European Computer Driving Licence Spreadsheet Software BCS ITQ Level 2 Using Microsoft Excel 2010 Syllabus Version 5.0 This training, which has been approved by BCS, The Chartered Institute for IT, includes
Creating Charts in Microsoft Excel A supplement to Chapter 5 of Quantitative Approaches in Business Studies
Creating Charts in Microsoft Excel A supplement to Chapter 5 of Quantitative Approaches in Business Studies Components of a Chart 1 Chart types 2 Data tables 4 The Chart Wizard 5 Column Charts 7 Line charts
MAT12X Intermediate Algebra
MAT12X Intermediate Algebra Workshop I - Exponential Functions LEARNING CENTER Overview Workshop I Exponential Functions of the form y = ab x Properties of the increasing and decreasing exponential functions
DISCOUNTED CASH FLOW VALUATION and MULTIPLE CASH FLOWS
Chapter 5 DISCOUNTED CASH FLOW VALUATION and MULTIPLE CASH FLOWS The basic PV and FV techniques can be extended to handle any number of cash flows. PV with multiple cash flows: Suppose you need $500 one
Basic Excel Handbook
2 5 2 7 1 1 0 4 3 9 8 1 Basic Excel Handbook Version 3.6 May 6, 2008 Contents Contents... 1 Part I: Background Information...3 About This Handbook... 4 Excel Terminology... 5 Excel Terminology (cont.)...
Time-Value-of-Money and Amortization Worksheets
2 Time-Value-of-Money and Amortization Worksheets The Time-Value-of-Money and Amortization worksheets are useful in applications where the cash flows are equal, evenly spaced, and either all inflows or
Introduction to Excel
Introduction to Excel This material has been reprinted, with permission, from the Excel Tutorial on the TRIO program webpage of the University of South Dakota. A series of "screencast" videos covering
Search help. More on Office.com: images templates. Here are some basic tasks that you can do in Microsoft Excel 2010.
Page 1 of 8 Excel 2010 Home > Excel 2010 Help and How-to > Getting started with Excel Search help More on Office.com: images templates Basic tasks in Excel 2010 Here are some basic tasks that you can do
Excel Guide for Finite Mathematics and Applied Calculus
Excel Guide for Finite Mathematics and Applied Calculus Revathi Narasimhan Kean University A technology guide to accompany Mathematical Applications, 6 th Edition Applied Calculus, 2 nd Edition Calculus:
Spreadsheets Hop-around Cards
Spreadsheets Hop-around Cards Visit us online at HOP-AROUND CARDS Preparation Print the cards out using a high quality colour printer Laminate each sheet and then cut out the individual cards to make a
INTRODUCTION TO EXCEL
INTRODUCTION TO EXCEL 1 INTRODUCTION Anyone who has used a computer for more than just playing games will be aware of spreadsheets A spreadsheet is a versatile computer program (package) that enables you
Advanced Excel Charts : Tables : Pivots : Macros
Advanced Excel Charts : Tables : Pivots : Macros Charts In Excel, charts are a great way to visualize your data. However, it is always good to remember some charts are not meant to display particular types
Excel Budget Homework
Excel Budget Homework CSE 3, Fall 2009 Due at the BEGINNING of your next lab. A. Annual Budget One of the most common uses of a spreadsheet is to chart financial information. We are going to create an
Move between open workbooks. Display the print menu. Select whole spreadsheet. Microsoft Excel Keyboard Keys. General
Microsoft Excel Keyboard Keys Source: http://allhotkeys.com/microsoft_excel_hotkeys.html General New file Ctrl + N Open file Ctrl + O Save file Ctrl + S Move between open workbooks Ctrl + F6 Close file
Compound Interest. Invest 500 that earns 10% interest each year for 3 years, where each interest payment is reinvested at the same rate:
Compound Interest Invest 500 that earns 10% interest each year for 3 years, where each interest payment is reinvested at the same rate: Table 1 Development of Nominal Payments and the Terminal Value, S.
How To Value A Bond In Excel
Financial Modeling Templates http://spreadsheetml.com/finance/bondvaluationyieldtomaturity.shtml Copyright (c) 2009-2014, ConnectCode All Rights Reserved. ConnectCode accepts no responsibility for any
Briefing document: How to create a Gantt chart using a spreadsheet
Briefing document: How to create a Gantt chart using a spreadsheet A Gantt chart is a popular way of using a bar-type chart to show the schedule for a project. It is named after Henry Gantt who created
Excel 2007: Basics Learning Guide
Excel 2007: Basics Learning Guide Exploring Excel At first glance, the new Excel 2007 interface may seem a bit unsettling, with fat bands called Ribbons replacing cascading text menus and task bars. This
EXCEL EXERCISE #8: Consolidating and Linking Spreadsheets
EXCEL EXERCISE #: Consolidating and Linking Spreadsheets. Enter the following information onto Sheet. Double click on the tab for the worksheet and rename it: East. (It represents sales in $000.) 0 Record
The Time Value of Money Part 2B Present Value of Annuities
Management 3 Quantitative Methods The Time Value of Money Part 2B Present Value of Annuities Revised 2/18/15 New Scenario We can trade a single sum of money today, a (PV) in return for a series of periodic
21.1 Arithmetic Growth and Simple Interest
21.1 Arithmetic Growth and Simple Interest When you open a savings account, your primary concerns are the safety and growth of your savings. Suppose you deposit $1000 in an account that pays interest at
PowerPoint. to accompany. Chapter 5. Interest Rates
PowerPoint to accompany Chapter 5 Interest Rates 5.1 Interest Rate Quotes and Adjustments To understand interest rates, it s important to think of interest rates as a price the price of using money. When
Computer Applications (10004)
Computer Applications (10004) Rationale Statement: With the growing need for computers in school and business, it is important that South Dakota high school students have an understanding of common application
Time Value of Money. 2014 Level I Quantitative Methods. IFT Notes for the CFA exam
Time Value of Money 2014 Level I Quantitative Methods IFT Notes for the CFA exam Contents 1. Introduction...2 2. Interest Rates: Interpretation...2 3. The Future Value of a Single Cash Flow...4 4. The
5 IN THIS CHAPTER. Working Capital and Cash Flow Analysis
Working Capital and Cash Flow Analysis Cash is the most liquid of all assets, so many managers are particularly interested in how much cash is available to a business at any given time. Because the flow
Future Value of an Annuity Sinking Fund. MATH 1003 Calculus and Linear Algebra (Lecture 3)
MATH 1003 Calculus and Linear Algebra (Lecture 3) Future Value of an Annuity Definition An annuity is a sequence of equal periodic payments. We call it an ordinary annuity if the payments are made at the
Currency Spending on durable medical equipment. Equipment Non-Durable Currency Spending on non-durable medical equipment.
Background Information Every year, there is a growth in healthcare expenditures in the United States. In 2008, spending on healthcare amounted to 15.2% of the economy, the largest of any developed country.
Microsoft Excel 2007 Cell Validation (Level 3)
IT Services Microsoft Excel 2007 Cell Validation (Level 3) Contents Introduction...1 Setting a Validation Rule on a Cell...1 Customising the Warning Message...2 Setting Warning Messages before Data Entry...3
Using Microsoft Excel 2010
Unit 5 Using Microsoft Excel 2010 Unit Objectives This unit includes the knowledge and skills required to analyze information in an electronic worksheet and to format information using functions specific
2: Formulas and Functions
2: Formulas and Functions Simple Formulas 1 Arithmetic Operators 1 Copying formulas 2 Cell References: Relative and Absolute Worksheet Functions 4 The AutoSum Tool The Paste Function and Formula Palette
Excel 2003 Tutorial I
This tutorial was adapted from a tutorial by see its complete version at http://www.fgcu.edu/support/office2000/excel/index.html Excel 2003 Tutorial I Spreadsheet Basics Screen Layout Title bar Menu bar
Chapter 4 Nominal and Effective Interest Rates
Chapter 4 Nominal and Effective Interest Rates Chapter 4 Nominal and Effective Interest Rates INEN 303 Sergiy Butenko Industrial & Systems Engineering Texas A&M University Nominal and Effective Interest
Finding the Payment $20,000 = C[1 1 / 1.0066667 48 ] /.0066667 C = $488.26
![Finding the Payment $20,000 = C[1 1 / 1.0066667 48 ] /.0066667 C = $488.26](/thumbs/17/134163.jpg "Finding the Payment $20,000 = C[1 1 / 1.0066667 48 ] /.0066667 C = $488.26")
Quick Quiz: Part 2 You know the payment amount for a loan and you want to know how much was borrowed. Do you compute a present value or a future value? You want to receive $5,000 per month in retirement.
EXCEL FINANCIAL USES
EXCEL FINANCIAL USES Table of Contents Page LESSON 1: FINANCIAL DOCUMENTS...1 Worksheet Design...1 Selecting a Template...2 Adding Data to a Template...3 Modifying Templates...3 Saving a New Workbook as
Formatting Formatting Tables
Intermediate Excel 2013 One major organizational change introduced in Excel 2007, was the ribbon. Each ribbon revealed many more options depending on the tab selected. The Help button is the question mark
Excel 2003 Tutorials - Video File Attributes
Using Excel Files 18.00 2.73 The Excel Environment 3.20 0.14 Opening Microsoft Excel 2.00 0.12 Opening a new workbook 1.40 0.26 Opening an existing workbook 1.50 0.37 Save a workbook 1.40 0.28 Copy a workbook
Introduction to Microsoft Excel 1 Part I
Introduction to Microsoft Excel 1 Part I Objectives When you complete this workshop you will be able to: Recognize Excel s basic operations and tools; Develop simple worksheets; Use formulas; Format worksheets;
Microsoft Excel 2010 Lesson 13: Practice Exercise 3
Microsoft Excel 2010 Lesson 13: Practice Exercise 3 Start with the Nutrition Excel spreadsheet, which can be found on the course Moodle page. Look for the link to Files for Excel Lessons. These worksheets
EXCEL PREREQUISITES SOLVING TIME VALUE OF MONEY PROBLEMS IN EXCEL
CHAPTER 3 Smart Excel Appendix Use the Smart Excel spreadsheets and animated tutorials at the Smart Finance section of http://www.cengage.co.uk/megginson. Appendix Contents Excel prerequisites Creating
Creating and Editing Workbooks. STUDENT LEARNING OUTCOMES (SLOs) After completing this chapter, you will be able to:
CHAPTER 1 Creating and Editing Workbooks CHAPTER OVERVIEW Microsoft Excel (Excel) is a spreadsheet program you can use to create electronic workbooks to organize numerical data, perform calculations, and
Calculating Loan Payments
IN THIS CHAPTER Calculating Loan Payments...............1 Calculating Principal Payments...........4 Working with Future Value...............7 Using the Present Value Function..........9 Calculating Interest
NESTED IFS, IF(AND), IF(OR)
NESTED IFS, IF(AND), IF(OR) MODELLING : CONTENTS Nested IF formulae IF(Or..) formulae IF(And ) formulae Wherever you see this symbol, make sure you remember to save your work! A simple IF Then statement
Basic Formulas in Excel. Why use cell names in formulas instead of actual numbers?
Understanding formulas Basic Formulas in Excel Formulas are placed into cells whenever you want Excel to add, subtract, multiply, divide or do other mathematical calculations. The formula should be placed
This activity will guide you to create formulas and use some of the built-in math functions in EXCEL.
Purpose: This activity will guide you to create formulas and use some of the built-in math functions in EXCEL. The three goals of the spreadsheet are: Given a triangle with two out of three angles known,
Chapter 8 Decision Support: Determine Feasibility of a Business Loan for the App
This is Decision Support: Determine Feasibility of a Business Loan for the App, chapter 8 from the book Designing Business Information Systems: Apps, Websites, and More (index.html) (v. 1.0). This book
Chapter 9 Creating Reports in Excel
Chapter 9 Creating Reports in Excel One of the most powerful features of Standard & Poor s Research Insight is its ability to communicate with Microsoft Excel through Active-X Technology. Excel requests
Microsoft Excel 2013 Tutorial
Microsoft Excel 2013 Tutorial TABLE OF CONTENTS 1. Getting Started Pg. 3 2. Creating A New Document Pg. 3 3. Saving Your Document Pg. 4 4. Toolbars Pg. 4 5. Formatting Pg. 6 Working With Cells Pg. 6 Changing
I Have...Who Has... Multiplication Game
How to play the game: Distribute the cards randomly to your students. Some students may get more than one card. Select a student to begin by reading their card aloud. (example: 35. who has 4x4?) 35 4 x
EXCEL Tutorial: How to use EXCEL for Graphs and Calculations.
EXCEL Tutorial: How to use EXCEL for Graphs and Calculations. Excel is powerful tool and can make your life easier if you are proficient in using it. You will need to use Excel to complete most of your
Interest Rates. Countrywide Building Society. Savings Growth Data Sheet. Gross (% per annum)
Interest Rates (% per annum) Countrywide Building Society This is the rate of simple interest earned in a year (before deducting tax). Dividing by 12 gives the monthly rate of interest. Annual Equivalent
Basic Microsoft Excel 2007
Basic Microsoft Excel 2007 The biggest difference between Excel 2007 and its predecessors is the new layout. All of the old functions are still there (with some new additions), but they are now located
Website Editor User Guide
CONTENTS Minimum System Requirements... 3 Design Your Website... 3 Choosing your Theme... 4 Choosing your Header Style... 4-5 Website Content Editor... 6 Text Editor Toolbar features... 6 Main Menu Items...
Creating Basic Excel Formulas
Creating Basic Excel Formulas Formulas are equations that perform calculations on values in your worksheet. Depending on how you build a formula in Excel will determine if the answer to your formula automatically
MGF 1107 Spring 11 Ref: 606977 Review for Exam 2. Write as a percent. 1) 3.1 1) Write as a decimal. 4) 60% 4) 5) 0.085% 5)
MGF 1107 Spring 11 Ref: 606977 Review for Exam 2 Mr. Guillen Exam 2 will be on 03/02/11 and covers the following sections: 8.1, 8.2, 8.3, 8.4, 8.5, 8.6. Write as a percent. 1) 3.1 1) 2) 1 8 2) 3) 7 4 3)
Time Value of Money 1
Time Value of Money 1 This topic introduces you to the analysis of trade-offs over time. Financial decisions involve costs and benefits that are spread over time. Financial decision makers in households
Preface of Excel Guide
Preface of Excel Guide The use of spreadsheets in a course designed primarily for business and social science majors can enhance the understanding of the underlying mathematical concepts. In addition,
What You ll Learn. And Why. Key Words. interest simple interest principal amount compound interest compounding period present value future value
What You ll Learn To solve problems involving compound interest and to research and compare various savings and investment options And Why Knowing how to save and invest the money you earn will help you
Interest Cost of Money Test - MoneyPower
Interest Cost of Money Test - MoneyPower Multiple Choice Identify the choice that best completes the statement or answers the question. 1. To determine the time value of depositing $100 in a savings account,
Excel 2010: Create your first spreadsheet
Excel 2010: Create your first spreadsheet Goals: After completing this course you will be able to: Create a new spreadsheet. Add, subtract, multiply, and divide in a spreadsheet. Enter and format column
Excel. Microsoft Office s spreadsheet application can be used to track. and analyze numerical data for display on screen or in printed
Excel Microsoft Office s spreadsheet application can be used to track and analyze numerical data for display on screen or in printed format. Excel is designed to help you record and calculate data, and
Review Page 468 #1,3,5,7,9,10
MAP4C Financial Student Checklist Topic/Goal Task Prerequisite Skills Simple & Compound Interest Video Lesson Part Video Lesson Part Worksheet (pages) Present Value Goal: I will use the present value formula