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

A foundation wants to pay a prize of €1 000 at the end of every year, forever. The fund earns 6% interest per year. How much must be invested today? Find PV.

A = €1 000i = 6%

PV = €

2.Easy

You deposit €4 000 at 7% interest per year, compounded annually (interest is added at the end of each year). After how many whole years n does the balance first reach at least €8 000?

PV = €4 000FV = €8 000i = 7%

n = years

3.Medium

You invest €20 000 at 7% per year with continuous compounding. Find the value FV after 2 years.

PV = €20 000r = 7%t = 2

FV = €

4.Medium

A property is expected to earn net rent of €12 000 next year. The rent is expected to grow by 1.5% per year forever. The required return is 6.5% per year. Find the value PV of the property today.

C₁ = €12 000g = 1.5%r = 6.5%

PV = €

5.Hard

You deposit €2 000 at the start of every year for 8 years, the first deposit today. The account pays 8% per year. How much is in the account at the end of year 8? Find FV.

A = €2 000i = 8%n = 8

FV = €

6.Hard

A mortgage of €200 000 is repaid with equal monthly payments over 30 years at 5.4% per year, compounded monthly. How much is still owed just after the payment at the end of year 18? Find the outstanding balance B.

P = €200 0005.4% / 12N = 360k = 216

B = €

Answer key

1. PV = 16667 €
2. n = 11 years
3. FV = 23005 €
4. PV = 240000 €
5. FV = 22975 €
6. B = 118832 €

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