Part 1 Future value of an annuity using Excel
Use Excel to create a spreadsheet as follows:
|1||Future value of an annuity|
|3||Annual rate:||5%||Monthly rate:||
|4||Period||Present Value (PV)||Interest (I)||Contribution (C)||P+I+C|
Fill row 5 down for 24 periods.
Use this spreadsheet to complete Exercise 7B, Question 11 a, c, e ...
Part 2 Annuity calculator
Use this Annuity Calculator to complete Exercise 7B, Question 2.
Check your answers.
Part 3 Loan repayment calculator
Using the Loan Repayment Calculator, investigate the following:
For a loan of $500 000,
- How much interest is payable on this loan, with a monthly payment frequency for an interest rate of 3.5%?
- How much less interest is payable if the payment frequency is fortnightly?
Part 4 Extra Repayments Calculator
Set the loan amount to $500 000, the payment frequency to monthly and the interest rate to 3.5%.
Set the extra contribution to $500 to start after 5 years.
How much interest is saved? How much time is saved off the length of the loan?
What extra contribution is required to reduce the loan length by 10 years?