A few people have written to inquire about the Six Functions of a Dollar. Hey - after I looked up what they were talking about I thought I would throw together a few formulas to show how excel can do this.
The basic starting thought is what happens to one dollar under different scenarios.
Typically it is set up at a 5 year period (which would be 60 months - I have in E2) at a certain interest rate - lets say 10% (which in excel would be best described as .10 - I have in E3).
| math | excel | answer | |
amount of $1 |
=(1+E3)^E2 | =FV(E3,E2,0,-1) | 304.48164 |
amount of $1 per period |
=(((1+E3)^E2)-1)/E3 | =FV(E3,E2,-1,0) | 3034.8164 |
sinking fund factor |
=E3/(((1+E3)^E2)-1) | = PMT(E3,E2,0,-1) | 0.0003295 |
present worth of $1 |
=(1/((1+E3)^E2)) | =PV(E3,E2,0,-1) | 0.0032842 |
present worth of $1 per period |
=(1-(1/(1+E3)^E2))/E3 | =PV(E3,E2,-1,0) | 9.9671573 |
partial payment |
=E3/(1-(1/(1+E3)^E2)) | =PMT(E3,E2,-1,0) | 0.1003295 |
The completed document can be downloaded (virus free and macro free) by clicking here (18k)
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