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 €2 500 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 €7 500?

PV = €2 500FV = €7 500i = 7%

n = years

2.Easy

You deposit €500 in a savings account that pays 7% interest per year, compounded annually. How much is in the account after 6 years? Find the future value FV.

PV = €500i = 7%n = 6

FV = €

3.Medium

A credit card charges a nominal interest rate of 18% per year, compounded semi-annually. Find the effective annual rate EAR in percent.

r = 18%m = 2

EAR = %

4.Medium

A property is expected to earn net rent of €2 000 next year. The rent is expected to grow by 2% per year forever. The required return is 7% per year. Find the value PV of the property today.

C₁ = €2 000g = 2%r = 7%

PV = €

5.Hard

A loan of €150 000 is repaid with equal monthly payments over 30 years. The interest rate is 6% per year, compounded monthly. Find the monthly payment A.

P = €150 0006% / 12N = 360

A = €

6.Hard

A loan of €25 000 is repaid with equal monthly payments over 5 years at 3.6% per year, compounded monthly. How much interest I is paid in total over the life of the loan?

P = €25 0003.6% / 12N = 60

I = €

Answer key

1. n = 17 years
2. FV = 750.4 €
3. EAR = 18.81 %
4. PV = 40000 €
5. A = 899.3 €
6. I = 2355 €

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