Finance excel assignment

HW3_ExcelTemplate-2.xls

Question #1a-e

1a. If the appropriate discount rate for the following cash flows is 9.75% per year, what is the present value of the cash flows?
	Rate		make the rate an absolute reference so that the formula may be entered once and then copied down.
	Year	Cash Flow	Present Value
	1
	2
	3
	4
		PV Today
1b. You are to make monthly deposits of $150 into a retirement account that pays 11 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 20 years?
	PMT =
	RATE =		(monthly rate here! Why?)
	NPER =		(number of months here! Why?)
	FV=
1c. Beginning three months from now, you want to be able to withdraw $1,200 each quarter from your bank account to cover college expenses over the next four years. If the account pays 0.50 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next four years?
	PMT =
	RATE =		(Should we enter quarterly rate here?)
	NPER =		(How may quarters?)
	PV=
1d. You want to be a millionaire when you retire in 40 years. How much do you have to save each month if you can earn a 10 percent annual return?
	FV =
	NPER =
	RATE =
	PMT=		In your formula, leave a space for PV!
1e. While Steve was a college student, he borrowed $12,000 in student loans at an annual interest rate of 9 percent. If Steve repays $1,500 per year, how long will it take him to repay the loan?
	PV=
	PMT=
	RATE =
	NPER=

3a. You have a loan of $25,000 and will repay the loan over 5 years at 8% interest. Develop a loan amortization schedule if your annual payment is fixed.
Rate
NPER
PV
PMT=
Year	Beginning Balance	Total Payment	Interest Paid	Principal Paid	Ending Balance
1
2
3
4
5
3b. You have a loan of $25,000 and will repay the loan over 5 years at 8% interest. Develop a loan amortization schedule if your principal is reduced by a fixed amount each year.
Year	Beginning Balance	Total Payment	Interest Paid	Principal Paid	Ending Balance
1
2
3
4
5

2a. a. You are looking at a bond that has 20 years to maturity. The coupon rate is 9% and coupons are paid semiannually. The yield-to-maturity is 7%. What is the current price? Is it a premium bond or a discount bond?
Settlement Date:		(Choose a date)
Maturity Date:		(Choose a date 30 years after settlement)
Coupon Rate:
YTM:
Face Value (% of par):
Coupons per year:
Price(% of par):
Formula:	=PRICE(B3,B4,B5,B6,B7,B8)
Premium or Discount Bond?

2b. b. You are looking at a bond that has 30 years to maturity. The coupon rate is 8% and coupons are paid semiannually. The current price is $950. What is the yield to maturity? Is it a premium bond or a discount bond?
Settlement Date:
Maturity Date:
Coupon Rate:
Bond Price (% of par):
Face Value (% of par):
Coupons per year:
Yield to maturity:
Formula:	=YIELD(B3,B4,B5,B6,B7,B8)
Premium or Discount Bond?