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Present Value /future Value of Lumpsum/annuity Inputs

This document provides examples of calculations for present and future values of lump sums and annuities using formulas, as well as calculations for net present value, payment amounts, internal rates of return, and growing perpetuities/annuities. It also demonstrates performing the same calculations using financial functions in a spreadsheet rather than manual formulas. The examples cover a range of scenarios involving cash flows over time with different inputs for periods, rates, payment amounts, present values, and future values.

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Ashutosh Biswal
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34 views

Present Value /future Value of Lumpsum/annuity Inputs

This document provides examples of calculations for present and future values of lump sums and annuities using formulas, as well as calculations for net present value, payment amounts, internal rates of return, and growing perpetuities/annuities. It also demonstrates performing the same calculations using financial functions in a spreadsheet rather than manual formulas. The examples cover a range of scenarios involving cash flows over time with different inputs for periods, rates, payment amounts, present values, and future values.

Uploaded by

Ashutosh Biswal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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1 Present Value /Future Value of lumpsum/Annuity

Inputs
Discount rate, k 8%
Periods, n 5
Annuity PMT ₹ 100.00
PV ₹ 1,000.00
FV ₹ 1,000.00

Outputs
PV of lumpsum (formula) ₹ 680.58 FV/(1+k)^n
FV of lumpsum (formula) ₹ 1,469.33 PV*(1+k)^n
PV of annuity (formula) ₹ 399.27 (PMT/k)*(1-1/(1+k)^n)
FV of annuity (formula) ₹ 586.66 (PMT/k)*((1+k)^n-1)
PV of perpetuity (formula) ₹ 12,500.00 PMT/k

2 Present Value of uneven cash flows


Inputs
Rate 10% Workings
Cash flows: Discount factor
1 ₹ 100.00 0.909091
2 ₹ 120.00 0.826446
3 ₹ 130.00 0.751315
4 ₹ - 0.683013
5 ₹ -40.00 0.620921
6
7
8
9
10

Output
PV ₹ 262.92 Sumproduct(Cash flows, Discount factor)

3 Annuity payments received or paid


Inputs
Discount rate, k 8%
Periods, n 5
PV ₹ 1,000.00
FV ₹ 1,000.00

Outputs
PMT for PV (formula) ₹ 250.46 (PV*k)/(1-1/(1+k)^n)
PMT for FV (formula) ₹ 170.46 (PV*k)/((1+k)^n-1)
4 Expected rate of return (discount rate)

5 Growing perpetuity/annuity
Inputs
PMT1 ₹ 100.00
Periods, n 5
Discount rate, k 8%
Growth rate, g 5%

Outputs
PV of Growing Perpetuity ₹ 3,333.33 PMT1/(k-g)
PV of Growing Annuity ₹ 437.95 (PMT1/(k-g))*(1-((1+g)/(1+k))^n)
Using Functions
Inputs
Discount rate, k 8%
Periods, n 5
Annuity PMT ₹ 100.00
PV ₹ 1,000.00
FV ₹ 1,000.00

Outputs
PV of lumpsum (function) ₹ 680.58 - PV(k,n,0,FV,)
FV of lumpsum (function) ₹ 1,469.33 - FV(k,n,0,PV,)
PV of annuity (function) ₹ 399.27 - PV(k,n,PMT,0,)
FV of annuity (function) ₹ 586.66 - FV(k,n,0,0,)

Using Functions
Inputs
Rate 10%
Discount factor Cash flows:
1 ₹ 100.00
2 ₹ 120.00
3 ₹ 130.00
4 ₹ -
5 ₹ -40.00
6
7
8
9
10

Output
PV ₹ 262.92 NPV(k%, CF1:CFn)

Using functions
Inputs
Discount rate, k 8%
Periods, n 5
PV ₹ 1,000.00
FV ₹ 1,000.00

Outputs
PMT for PV (function) ₹ 250.46 - PMT(k,n,PV,0,)
PMT for FV (function) ₹ 170.46 - PMT(k,n,0,FV,)
Using functions
Inputs
Periods, n 4
Annuity PMT ₹ 3,800.00
PV ₹ 10,000.00
FV ₹ 20,000.00

Outputs
Rate given PV & annuity 19.14% RATE(n,PMT,-PV,0,,)
Rate given FV & annuity 18.63% RATE(n,PMT,0,-FV,,)

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