Compare different interest rates versus years of investment

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Reference no: EM131943216

Financial Analysis Problem Create a table which determines the future value of an investment by comparing different interest rates and years of investment. To simplify your analysis, you will use a simple compounded annually formulation which considers the principal investment (P), interest rate (i) and the number of periods (n) over which the interest is compounded. Future Value: F = P(1+i)^n In the upper left hand corner of the first worksheet provide heading information as described above.

Provide a description of the sheet.

Provide a gray shaded cell for input of principal.

Create a well formatted Future Value table that will compare different interest rates versus years of investment. To do so, use the Fill feature to generate a column of Years of Investment ranging from 0 to 70 in 5 year increments. Then, generate a row of interest rate values ranging from 1 to 6%, in 0.5% increments, with each interest rate in a different column. Note, the headings should be center justified, bold font. You may need to use the Wrap Text option for the Years of Investment heading. Also, use the Merge Cells option to center a table title appropriately.

Fill the values of the different cells in the table, carefully using relative, mixed, and absolute cell referencing techniques.

Above the upper right corner of the table, use the Equation Editor to include the equation for calculating future amount.

Create a similar table, but use Excel’s financial future value function - FV(rate,nper,pmt,[pv],[type]) to determine the return of investment.

For [pv], use –P, where P is your principal amount.

Omit the [type] entry. It is not needed in this case.

Effectively format your sheet by appropriately using percentage and dollar formats, bold fonts, font sizes and borders.

Reference no: EM131943216

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