Prepare in a Excell worksheet the following investment options and calculate for
ID: 2542330 • Letter: P
Question
Prepare in a Excell worksheet the following investment options and calculate for each one of them: interests of each period, future value at the end of each period and rate of return at the end of each period. What's the accumulated or final value for each investment option? 1) Initial investment of 5000 eur at constant simple interest rate of 10% in 5 years Initial investment of 5000 eur at simple interest rate not constant in 5 years. The yearly simple interests are the following ones: 2) 4 10% 5% 6% 7% 10% 3) Initial investment of 5000 eur at constant compound interest rate of 10% in 5 years 4) Initial investment of 5000 eur at compound interest rate not constant in 5 years. The yearly compound interests are the following ones: 4 10% 5% 6% 7% 10%Explanation / Answer
(1) Investment Value = P (1+RT)
= 5000 Eur {(1+(0.10 x 5 )}
= 5000 Eur x 1.50
= 7500 Eur
(2) Investment Value = P + { P(R1) + P(R2) + P(R3) + P(R4) + P(R5) }
= 5000 Eur + { (5000*0.10)+(5000*0.05)+(5000*0.06)+(5000*0.07)+(5000*0.10) }
= 5000 + 500 + 250 + 300 + 350 + 500
= 6900 Eur
(3) Investment Value = P (1+R)t
= 5000 Eur (1+0.10)5
= 5000 Eur x 1.6105
= 8052.55 Eur
(4) Investment Value
Interest for Year 1 = 5000 x 0.10 = 500
Interest for Year 2 = 5500 x 0.05 = 275
Interest for Year 3 = 5775 x 0.06 = 346
Interest for Year 4 = 6121 x 0.07 = 428
Interest for Year 5 = 6549 x 0.10 = 655
Investment Value at the end of year 5 = 7204 Eur