View Single Post
  #5   Report Post  
Posted to microsoft.public.excel.worksheet.functions
Bruno Campanini[_2_] Bruno Campanini[_2_] is offline
external usenet poster
 
Posts: 74
Default Calculating Future Value

Tamera George explained :
I am trying to calculate the following

Find the future value of an investment of $5,000 made today for the
following

1,) 6.25 percent compounded semi-annually for twelve years

2.) 7.63 percent compounded quarterly for six years

3.) 8.9 percent compounded monthly for ten years

4.) 10 percent compounded daily for three years

5.) 8 percent compounded continuously for two years

I don't really want you to do the calculations for me, I need to know how to
do the calculations to find these various types of answers using Excel. If
you do work the problem please change the numbers so that I can follow what
you are doing but am not getting the answer from you on this specific
problem. I just am trying to learn how to do the calculations myself.

Thanks for the help!


I suppose the interest rates 6.25, 7.63, 8.9, 10 and 8 are effective
annual rates to be converted in effective infra-annual rates as
follows:

i2 = (1+0.0625)^(1/2)-1 FV = 5000(1+i2)^24
i4 = (1+0.0763)^(1/4)-1 FV = 5000(1+i4)^24
i12 = (1+0.089)^(1/12)-1 FV = 5000(1+i12)^120
i365 = (1+0.1)^(1/365)-1 FV = 5000(1+i365)^1095

and for the 5th case FV = 5000 e^(0.08*2)

These calculations may differ from the Excel's ones.
In fact Excel uses the standard US banking calculations which take into
account bank profits instead of mathematical principles.

Bruno