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 will receive €5 000 in 4 years. The interest rate is 6% per year, compounded annually. What is this amount worth today? Find the present value PV.

FV = €5 000i = 6%n = 4

PV = €

2.Easy

You deposit €4 000 at 8% 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 = 8%

n = years

3.Medium

A credit card charges a nominal interest rate of 20% per year, compounded semi-annually. Find the effective annual rate EAR in percent.

r = 20%m = 2

EAR = %

4.Medium

A property is expected to earn net rent of €6 000 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 = €6 000g = 1.5%r = 6.5%

PV = €

5.Hard

You save €500 at the end of every month for 22 years. The account pays 4.2% per year, compounded monthly. How much have you saved at the end? Find FV.

A = €5004.2% / 12N = 264

FV = €

6.Hard

You borrow €15 000 at 4.8% per year, compounded monthly, and repay €300 at the end of every month. How many months does it take until the loan is repaid (the last payment may be smaller)? Give the number of payments N.

P = €15 000A = €3004.8% / 12

N = payments

Answer key

1. PV = 3960 €
2. n = 12 years
3. EAR = 21 %
4. PV = 120000 €
5. FV = 216470 €
6. N = 56 payments

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