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Excel File Edit View Insert Format Tools Data Window Help Group a 100% Home Layout Tables Charts SmartArt Formulas Data Review Edit Font L Calibri (Body)1, 11-El-Al-abc, Fill e) wrap Text. Gene Clear BIUU N2 An investment is made in the amount of $26,000 and the contract calls for investment returns to be reported s compounded annually. Monthly cash flows of $400 are received for 12 months. What is the annual return on the investment? What is the future value of a deposit of $1,000.00 at a rate of 5%. lf compounded annually? 73 74 If compounded semi- annually? 75 76 80 81 82If compounded quarterly? 83 84 85 86 87 89 If compounded monthly? 90 Read IW Normal View

Explanation / Answer

PV = -26,000, FV = 26,000, PMT = 400, N = 12

use rate function in Excel

monthy rate = 1.5385%

annual rate = 1.015385^12 - 1 = 20.11%

2. Future value = 1.05 * 1000 = 1050

b. future value = 1000*1.025^2 = 1050.625

c. future value = 1000*(1+5%/4)^4 = 1050.9453

d. future value = 1000*(1 + 5%/12)^12 = 1051.1619

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