Hi There! I solved the problem below, but can you answer the question and put everything on an excel spreadsheet and show the formulas please for the questions below.You are offered the opportunity to put some money away for retirement. You will receive 10 annual payments of $5,000 each beginning in 26 years. If you desire an annual interest rate of 12% compounded monthly, answer the following two questions: How much would you be willing to invest today?How much would the money (that you will be willing to invest today) be worth at the end of your last payment (i.e., in year 35)? Amount that you would be willing to invest today =PV = $5,000/(1.01)26*12 + $5,000/(1.101)27*12 + $5,000/(1.01)28*12 + $5,000/(1.01)29*12 + $5,000/(1.01)30*12 + $5,000/(1.01)31*12 + $5,000/(1.01)32*12 + $5,000/(1.01)33*12 + $5,000/(1.01)34*12 + $5,000/(1.01)35*12= $1,388.638 Amount that would the money worth at the end of your last payment =FV = $1388.64 * (1+ 0.01)35*12= $90691.52

Present value:Present value is a financial concept that calculates the present value of future cash…

Answered: You are offered the opportunity to put…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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Hi There! I solved the problem below, but can you answer the question and put everything on an excel spreadsheet and show the formulas please for the questions below.

You are offered the opportunity to put some money away for retirement. You will receive 10 annual payments of $5,000 each beginning in 26 years. If you desire an annual interest rate of 12% compounded monthly, answer the following two questions:

How much would you be willing to invest today?
How much would the money (that you will be willing to invest today) be worth at the end of your last payment (i.e., in year 35)?

Amount that you would be willing to invest today =

PV = $5,000/(1.01)^26*12 + $5,000/(1.101)^27*12 + $5,000/(1.01)^28*12 + $5,000/(1.01)^29*12 + $5,000/(1.01)^30*12 + $5,000/(1.01)^31*12 + $5,000/(1.01)^32*12 + $5,000/(1.01)^33*12 + $5,000/(1.01)^34*12 + $5,000/(1.01)^35*12

= $1,388.638

Amount that would the money worth at the end of your last payment =

FV = $1388.64 * (1+ 0.01)^35*12

= $90691.52

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