Time value of money worksheet with answers

Free printable Time value of money worksheet: 6 problems from easy to exam level, with an answer key. Print it or save it as a PDF.

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Name: ____________________ Date: ____________

1.Easy

You deposit €1 000 in a savings account that pays 2% interest per year, compounded annually. How much is in the account after 6 years? Find the future value FV.

PV = €1 000i = 2%n = 6

FV = €

2.Easy

You deposit €4 000 in a savings account that pays 1.5% interest per year, compounded annually. How much is in the account after 5 years? Find the future value FV.

PV = €4 000i = 1.5%n = 5

FV = €

3.Medium

A property is expected to earn net rent of €5 000 next year. The rent is expected to grow by 2% per year forever. The required return is 8% per year. Find the value PV of the property today.

C₁ = €5 000g = 2%r = 8%

PV = €

4.Medium

A credit card charges a nominal interest rate of 15% per year, compounded semi-annually. Find the effective annual rate EAR in percent.

r = 15%m = 2

EAR = %

5.Hard

A mortgage of €150 000 is repaid with equal monthly payments over 25 years at 4.8% per year, compounded monthly. How much is still owed just after the payment at the end of year 17? Find the outstanding balance B.

P = €150 0004.8% / 12N = 300k = 204

B = €

6.Hard

A mortgage of €250 000 is repaid with equal monthly payments over 30 years at 4.2% per year, compounded monthly. How much is still owed just after the payment at the end of year 7? Find the outstanding balance B.

P = €250 0004.2% / 12N = 360k = 84

B = €

Answer key

1. FV = 1126 €
2. FV = 4309 €
3. PV = 83333 €
4. EAR = 15.56 %
5. B = 68404 €
6. B = 216130 €

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