Hi can you explain step by step this Excel solution? Thanks A1ParticularsValues2000002 Future Value (FV)3 Interest rate Compounded monthly (I/Y) 0.054 Monthly interest rate5 Time period6 Total number of months(NPER)=B3/128 years|=8*12|=PMT(B4,B6,,-B2)|=B7*B6|=B2-BS7Monthly Deposit8 Total amount depositedTotal interest earned (d) Gabrielle needs $200,000 in eight years. She has set up a sinking fund that earns 5% compoundedmonthly in order to have the amount in eight years?(1) How much should she deposit each month?(ii) How much interest is earned over the period?

When interest is compounded monthly, the interest rate per annum shall be divided by 12 to calculate…

A B 1 Particulars Values 2 Future Value (FV) 3 Interest rate Compounded monthly (I/Y) |0.05 4 Monthly interest rate 5 Time period 200000 =B3/12 8 years |=8*12 |=PMT(B4,B6,,-B2) =B7*B6 =B2-BS 6 Total number of months(NPER) Monthly Deposit 8 Total amount deposited 7 Total interest earned

A B 1 Particulars Values 2 Future Value (FV) 3 Interest rate Compounded monthly (I/Y) |0.05 4 Monthly interest rate 5 Time period 200000 =B3/12 8 years |=812 |=PMT(B4,B6,,-B2) =B7B6 =B2-BS 6 Total number of months(NPER) Monthly Deposit 8 Total amount deposited 7 Total interest earned

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 13E

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

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Hi can you explain step by step this Excel solution? Thanks

A
1
Particulars
Values
200000
2 Future Value (FV)
3 Interest rate Compounded monthly (I/Y) 0.05
4 Monthly interest rate
5 Time period
6 Total number of months(NPER)
=B3/12
8 years
|=8*12
|=PMT(B4,B6,,-B2)
|=B7*B6
|=B2-BS
7
Monthly Deposit
8 Total amount deposited
Total interest earned

(d) Gabrielle needs $200,000 in eight years. She has set up a sinking fund that earns 5% compounded
monthly in order to have the amount in eight years?
(1) How much should she deposit each month?
(ii) How much interest is earned over the period?

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