Question

$100 is deposited at the end of every week for five years in an account that pays 14%/a, compounded weekly.

Answer 1

Find the future value of the annuity using the formula.
Find the future value of the annuity using a spreadsheet. In your answer include the formulas that you typed.
Find the furture value of the annuity using the TVM solver on a graphing calculator or on a website. In your answer, include what values you typed for each parameter.

Answer 2

you need the annuity formula

Answer 3

how do you find the compounding periods

Answer 4

and what spreadsheet should i use?

Answer 5

weekly means 52

Answer 6

here is more descriptive formula
$$\Large A = \frac{P~((1 + \frac r n )^{nt}-1)}{\frac r n }$$
P = regular payment into account
r = annual interest rate
n= # of times compounded a year
t = # of years

Answer 7

here r = 0.14
n = 52
t = 5

Answer 8

okay thanks and what spreadsheet should i use?

Answer 9

excel works :)

Answer 10

First you will need the compounded interest rate
Rate = [(1 + (annual rate / 52) ^ 52] -1
Rate = [(1 + 14/52) ^52]-1
Rate = [(1.2692307692)^52]-1
Rate = 1.1500574252 -1
Rate = .1500574252
Rate = 15.00574252 %

Answer 11

i meant template

Answer 12

The free to download Open Office Calc works just as well as Excel

Answer 13

i dont know how to make it

Answer 14

:/

Answer 15

wolf, what is that formula?

Answer 16

don't know how to make what?

Answer 17

im supposed to use a spreadsheet but i dont know how to make one that would give my answers

Answer 18

ill post an excel spreadsheet

Answer 19

okay thanks

Answer 20

The formula is converting an annual interest rate into the rate after it is compounded.
In that case it converts an annual rate into the rate if it were compounded weekly.

Answer 21

so should i use what wolf said or jayzdd?

Answer 22

I'm trying to find a weekly annuity formula
Here is one for monthly annuities:

Answer 23

Where n is the number of weeks and the
interest rate is rate divided by 5200 for number of weeks and 100 tochange from per cent to decimal

Answer 24

@jayzdd can i please get the excel spreadsheet?

Answer 25

A=P ((1+rn)^nt −1)/rn using this formula i got 5.4870 is that right?

Answer 26

yes i have it

Answer 27

okay thank you!

Answer 28

GEEZ - I got kicked off the question and a LOT of calculations went with it
ARRGGGGHHHH!!!!!!!!!!!!!!

Answer 29

oh no :(

Answer 30

I use a notepad file and copy paste any Latex , and text, periodically (no pun intended).

Answer 31

whats happening? lol

Answer 32

@wolf1728 what calculations, i am interested

Answer 33

@jayzdd A=P ((1+rn)^nt −1)/rn using this formula i got 5.4870 is that right?

Answer 34

n = 260 weeks
rate = 15.00574252% / 5200 = 0.0028857197

Total = 100* ((1+ 0.0028857197)^261 -1)/0.0028857197) -100

Total = 38861.2021295111
Total = 38,861.20 (rounded)

Answer 35

thats incorrect
it should be
A=P ((1+r/n)^(n*t) −1)/(r/n)

Answer 36

yeah that is the formula i used

Answer 37

you need parentheses in the denominator

Answer 38

https://www.google.com/search?q=100*+%28%281+%2B.14%2F52%29^%2852*5%29-1%29%2F%28.14%2F52%29&ie=utf-8&oe=utf-8

Answer 39

okay thank you!

Answer 40

so whos answer should i use? @wolf1728 or @jayzdd

Answer 41

i am using this annuities formula

Answer 42

Note that, the equation in that pdf is valid when depositing at *end* of each period.
This is stated in your problem 'end of every week'.
If you deposit at the beginning of each week, you would have to use a similar but different formula.

Answer 43

okay thanks

Answer 44

jayzdd
Yes, my formula is slightly different - among other things it calculates 261 weeks versus 260 weeks in your formula.

Answer 45

do you have documentation for your formula?

Answer 46

It is from my website
http://www.1728.org/annuity3.htm

I had to change it for this problem from months to weeks

Answer 47

I'm gonna get going 7:00 a.m.
c ya

Answer 48

I don't think thats right.
I got a different answer
maybe the discrepancy has to do with when you are depositing the amount, at the beginning or end of the period.
your example is to the right

Answer 49

@shair
do you have any questions about the excel
the last part of the assignment you need a TVM calculator.
i think you can use excel as well

Answer 50

no thanks for your help!!

Answer 51

it says to include formulas...which formula?

Answer 52

is it the one in fx bar?

Answer 53

for the tvm questions this works: lise deposits $1000 at the end of each month for five years in an account that earns 12%/a, compounded quarterly. Using the TVM, calculate the accumulated value at the end of five years.

Solution

Before entering values we need to calculate the nominal monthly interest rate. We are given the quarterly interest rate in the question is:

Quarterly Interest Rate===12%÷43%0.03
We can use this to determine the nominal monthly rate, i, is:

(1+0.03)41.125508811.12550881−−−−−−−−−√121.0099016340.009901634i======(1+i)12(1+i)121+i1+ii0.99%
Lastly, we need to determine the annual interest rate:

Annual Interest Rate==0.99%×1211.88%
Now we can use the TVM solver to solve using these steps:

Open the TVM Calculator.
Enter the following:
Periods = 60 (there are 12 x 5 = 60 payment intervals)
Rate = 11.88 (annual interest rate)
PV = 0.00
PMT = –1 000 (this value is negative since the payment is an outflow of cash)
FV = Leave this cell blank

Answer 54

but when i divide 14% with 52 it gives me an awkward value

Answer 55

im back

Answer 56

it says to include formula. does that mean the one in the fx bar?

Answer 57

i have to go back here

Answer 58

what TVM calculator are you using

Answer 59

http://www.zenwealth.com/BusinessFinanceOnline/TVM/TVMCalculator.html

Answer 60

with the calculator i got 37328.69

Answer 61

first test it with values that make sense

Answer 62

i did

Answer 63

did you get this
http://prntscr.com/9hnspl

Answer 64

I entered
PV =0
Rate = 14%
PMT= -1000
Periods = 5*52 = 260
Weekly

then click on FV

Answer 65

no for the rate i pu 210.7 (11.60 * 14)

Answer 66

and for periods i did 14*5 = 70

Answer 67

are you doing a different problem?

Answer 68

oops, should be -100
http://prntscr.com/9hnujw

Answer 69

what is the question again?
lets start over

Answer 70

okay so, im supposed yo use a tvm calc for the same question

Answer 71

$100 is deposited at the end of every week for five years in an account that pays 14%/a, compounded weekly

Answer 72

I entered
PV =0
Rate = 210.7%
PMT= -1000
Periods = 5*14 = 260
Weekly

Answer 73

Using this calculator: http://www.zenwealth.com/BusinessFinanceOnline/TVM/TVMCalculator.html
PV =0
Rate = 14%
PMT= -1000
Periods = 260

Answer 74

rate is the annual interest rate

Answer 75

sorry for periods i got 70

Answer 76

Open the TVM Calculator.
Enter the following:
Periods = 60 (there are 12 x 5 = 60 payment intervals)
Rate = 11.88 (annual interest rate)
PV = 0.00
PMT = –1 000 (this value is negative since the payment is an outflow of cash)
FV = Leave this cell blan

Answer 77

i followed that^^^

Answer 78

different TVM calculators are slightly different.
so you have to figure out how it behaves

Answer 79

right

Answer 80

so should i go with what u said?

Answer 81

the calculator im following says to find the annual interest rate...

Answer 82

so 14% isnt the annual interest

Answer 83

14 is the annual interest rate

Answer 84

usually the rate given in a TVM calculator means the annual interest rate

Answer 85

okay thanks

Answer 86

Before entering values we need to calculate the nominal monthly interest rate. We are given the quarterly interest rate in the question is:

Quarterly Interest Rate===12%÷43%0.03
We can use this to determine the nominal monthly rate, i, is:

(1+0.03)41.125508811.12550881−−−−−−−−−√121.0099016340.009901634i======(1+i)12(1+i)121+i1+ii0.99%
Lastly, we need to determine the annual interest rate:

Annual Interest Rate==0.99%×1211.88%
Now we can use the TVM solver to solve using these steps:

Open the TVM Calculator.
Enter the following:
Periods = 60 (there are 12 x 5 = 60 payment intervals)
Rate = 11.88 (annual interest rate)
PV = 0.00
PMT = –1 000

Answer 87

this is what i followed

Answer 88

can u please review this

Answer 89

Elise deposits $1000 at the end of each month for five years in an account that earns 12%/a, compounded quarterly. Using the TVM, calculate the accumulated value at the end of five years.

Answer 90

for this questions

Answer 91

Elise deposits $1000 at the end of each month for five years in an account that earns 12%/a, compounded quarterly. Using the TVM, calculate the accumulated value at the end of five years.

PV = 0
Rate = 12%
PMT= -1000
Periods = 5*4 = 20

Answer 92

then why did they input Periods = 60 (there are 12 x 5 = 60 payment intervals)
Rate = 11.88 (annual interest rate)

Answer 93

i cant see what you're looking at

Answer 94

who is 'they'

Answer 95

in the answer it says the period is 60