Please write the formula you use in excel and also attach the excel answers.
a) With interest rate 8%, calculate the PV of following cash flows.
|
Year
|
Payment
|
PV
|
|
1
|
1,000
|
|
|
2
|
1,000
|
|
|
3
|
1,000
|
|
|
4
|
1,000
|
|
|
5
|
1,000
|
|
b) You borrow $10,000 today with interest rate 7%, and you plan to pay the bank back with 8 equal annual payment. Please fill up the following table.
|
Year
|
Principal
beg. year
|
Payment
end year
|
Interest
|
Principal
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
2
|
|
|
|
|
|
3
|
|
|
|
|
|
4
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
|
7
|
|
|
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|
|
8
|
|
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