Value Worksheet With Answer Key Page 3
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1
2
3
4
5
6
7
88.5
Joseph’s Solution: Using a Spreadsheet
Formulas (as entered)
Values (as displayed)
A
B
A
B
I entered the deposit numbers into
1
Deposit
Future Value
1
Deposit
Future Value
the first column. In the second
5300*(1.02)^A2
2
0
300.00
2
0
column, I used the formula
511A2
5300*(1.02)^A3
3
1
306.00
n
3
300(1.02)
to calculate the future
value of each deposit.
4
2
312.12
I used the Fill Down command to
5SUM(B2:B11)
12
Sum
complete and display the future values.
5B12 2 (10*300)
11
9
358.53
13
Interest
To determine the future value of the
12
Sum
3284.92
annuity, I calculated the total of all
13
Interest
284.92
these amounts. I then subtracted the
amount of the actual deposits to
calculate the interest.
a) Steve will earn a total of $3284.92.
b) $284.92 of the amount is interest earned.
Sergei’s Solution: Use the TVM Solver
I entered 10 beside N for the 10
a)
compounding periods (not the number
of years) and 4 beside I for 4% annual
interest. PV is not required, so it is 0. I
entered 2 300 beside PMT because this is
money Asif must pay. P/Y and C/Y are
both 2 because the payments are made
and compounded semi-annually.
I wanted to solve for the future value, so
I entered 0 for FV. I placed the cursor
beside FV because I was solving for it.
I solved for FV. The future value is positive
because it is money that Asif will receive.
Steve will earn a total of $3284.92.
I calculated the interest earned by
3284.92 2 (10 3 300) 5 284.92
subtracting the total of the payments,
b)
10 3 $300,
from the future value.
$284.92 of the amount is interest earned.
495
NEL
Solving Financial Problems Involving Exponential Functions
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