twinmom2010
New member
- Joined
- May 12, 2012
- Messages
- 1
Here is the problem:
The CEO has decided to plan for a salary action affecting a number of individuals in the organization. He has decided to give a $2,000 cost-of-living pay increase to all hourly employees and a $4,000 increase to all software analysts with salaries less than $55,000. The total funding you need is $64,000. However, he wants to do this in 2 years. He wants you to give him two options (you do not have to recommend an option).
Option 1: How much would he have to invest today in a single lump sum at a 6% annual interest rate compounded quarterly to have sufficient funds to execute his plan?
Option 2: How much would he have to invest in equal monthly payments at a 3% annual interest rate compounded monthly to have sufficient funds to execute his plan?
Hints:
Excel Functions:
PV – Returns the present value of a future amount
PMT – Calculates the payment necessary to accumulate a future amount
I was given this promblem in a spreadsheet application class. I have never taken a business algebra class before. I tried looking up functions in excel but i can't understand the definitions of the functions.
The CEO has decided to plan for a salary action affecting a number of individuals in the organization. He has decided to give a $2,000 cost-of-living pay increase to all hourly employees and a $4,000 increase to all software analysts with salaries less than $55,000. The total funding you need is $64,000. However, he wants to do this in 2 years. He wants you to give him two options (you do not have to recommend an option).
Option 1: How much would he have to invest today in a single lump sum at a 6% annual interest rate compounded quarterly to have sufficient funds to execute his plan?
Option 2: How much would he have to invest in equal monthly payments at a 3% annual interest rate compounded monthly to have sufficient funds to execute his plan?
Hints:
Excel Functions:
PV – Returns the present value of a future amount
PMT – Calculates the payment necessary to accumulate a future amount
Compound Interest Formulas:
A = P(1 + i)n
A = P(1 + i)n
FV=PMT× | (1+i)n – 1
| ||||||
| |||||||
|
I was given this promblem in a spreadsheet application class. I have never taken a business algebra class before. I tried looking up functions in excel but i can't understand the definitions of the functions.
Last edited: