fe170622067bd4097b6fefb9133141d6 excel essentials for beginners templates workbook

8/19/2019 Fe170622067bd4097b6fefb9133141d6 Excel Essentials for Beginners Templates Workbook

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Discrete Annual Compound Interest

Interest Rate

Year Cash Balance

0 1,000.001

2

3

4

5

!

"

#

10

$%&ord 'ni(ersit) *ress +2011 pp. "3-#3

ote/ his discrete annual compound interest e%ample is &rom imon Bennina, Principles of F


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inance with Excel, Second Edition


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%cel uses standard *DA order o& operations &or

*arentheses, %ponents, ultiplication and Di(ision, a

*arentheses +-3%ponents - use caret 7 +&or e%a

ultiplication - use asteris: ;

Di(ision - use slash e >ant +-3+4=2 ? 1"

?-3;4=2

Assume >e >ant +3


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rithmetic

nd Addition and u6traction

ple, si% s8uared is 729 s8uare root o& si% is 7+.5


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%ample

natural lo lo to the 6ase e o& 1.5

ln

lo to the 6ase 2 lo to the 6ase 2 o& 1.5lo+num6er, 6ase

pi 1 di(ided 6) the s8uare root o& pi

pi+

random num6er 6et>een 0 and 1

?rand+

A B C D

1

2

3

4

5

6

7

8

9

10

11

12


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Ad@usted monthl) closin prices +&rom Yahoo nance

Date S&P 500 Index Duke Energy Stock

"


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4


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#


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2


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!


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onthl) continuousl) compounded +lo returns

S&P 500 Index Duke Energy Stock


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1! months - 1!5 returns

return data located ro>s 4 - 1!"

Functions on one column at a time

S&P 500 Index Duke Energy Stock

a(erae monthl) return

a(erae annual return

standard de(iation o& monthl) returns

annualied standard de(iation o& returns

minimum

ma%imum

Functions on two columns at the same time (ordered pairs)

S&P 500 Index - x axis Duke Energy Stock - y axis

Description of best-t (regression) line - Duke on SP !""

slope

)-intercept

correlation

R-s8uared


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14.5" )ears


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Date S&P 500 Index Duke Energy Stock

2


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#


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5


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1


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#


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5


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Discrete Annual Compound Interest 'se $EFR >hen G+% ? )

>ant ) at a certain (alue,

Interest Rate >ant ) at a ma%imum or

10.00 i(en certain constraints o

Year Cash Balance0 H1,000.00

1 H1,100.00

2 H1,210.00

3 H1,331.00

4 H1,44.10

5 H1,10.51

H1,!!1.5

! H1,#4".!2

" H2,143.5#

# H2,35!.#510 H2,5#3.!4

use ol(er to calculate

+1 hat discrete annual interest rate, at an initial 6alance o& H1,000

+2 hat initial 6alance, at an interest rate o& 10, results in H5,000

+3 Challene pro6lem

uppose )ou >anted to :no>/ a&ter ho> man) )ears >ill H1000 at !

Kint/ this re8uires re-structurin the &ormula so that the chanin nu


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, or G+%1, %2, %3, etc ? ).

r

inimum,

n (alues o& %.

, results in H5,000 a&ter 10 )earsJ

a&ter 10 )earsJ

6e >orth H5,000J

m6er o& )ears is located in one cell location


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Discrete Annual Compound Interest

Interest Rate

!.00

Year Cash Balance

0 H1,000.00

1 H1,0!0.00

2 H1,144.#0

3 H1,225.04

4 H1,310."0

5 H1,402.55 H1,500.!3

! H1,05.!"

" H1,!1".1#

# H1,"3".4

10 H1,#!.15

A&ter ho> man) )ears >ill H1000 at ! 6e >orth H5,0

num6er o& )ears 10

restated &ormula


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0J


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Cop)riht Daniel


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er< Attri6ution 4.0 Inter


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ational +CC BY 4.0

fe170622067bd4097b6fefb9133141d6 excel essentials for beginners templates workbook

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