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 €10 000 at the end of every year, forever. The fund earns 8% interest per year. How much must be invested today? Find PV.

A = €10 000i = 8%

PV = €

2.Easy

You deposit €4 000 at 4% 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 €10 000?

PV = €4 000FV = €10 000i = 4%

n = years

3.Medium

A property is expected to earn net rent of €20 000 next year. The rent is expected to grow by 1.5% per year forever. The required return is 5.5% per year. Find the value PV of the property today.

C₁ = €20 000g = 1.5%r = 5.5%

PV = €

4.Medium

An annuity pays €3 000 at the end of each year for 10 years. The interest rate is 6% per year. Find the present value PV of the annuity.

A = €3 000i = 6%n = 10

PV = €

5.Hard

A loan of €12 000 is repaid with equal monthly payments over 5 years. The interest rate is 3% per year, compounded monthly. Find the monthly payment A.

P = €12 0003% / 12N = 60

A = €

6.Hard

A mortgage of €250 000 is repaid with equal monthly payments over 30 years at 3.6% 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 0003.6% / 12N = 360k = 84

B = €

Answer key

1. PV = 125000 €
2. n = 24 years
3. PV = 500000 €
4. PV = 22080 €
5. A = 215.6 €
6. B = 213129 €

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