Topic 4: Time Value of Money - Amortization Table Model

This topic corresponds to Chapter 7 in your textbook.

Spreadsheets for this Section:

Time Value Review:

Time Value Review Setup Spreadsheet

Time Value Review Setup Spreadsheet after 04-01

Time Value Review Setup Spreadsheet after 04-02

Time Value Review Setup Spreadsheet after 04-03

Time Value Review Setup Spreadsheet after 04-04

Time Value Review Setup Spreadsheet Completed

Amortization Table Model::

Amortization Table Model Setup Spreadsheet

Amortization Table Model Setup Spreadsheet after 04-06

Amortization Table Model Setup Spreadsheet after 04-07

Amortization Table Model Setup Spreadsheet Completed

SML and Risk-Return Trade-Off (04-09)

Risk-Return Handout

Example spreadsheet

Damodaran historical risk premium spreadsheet (The current version of this spreadsheet is on Dr. Damodaran's website here under UPDATED DATA.)

Videos for this Section:

(Note: These videos are also posted on YouTube with optional captions at this link.)

04-01 Time Value Review Part 1

Overview, Future Value, Simple and Compound Interest, Data Tables

Functions Introduced: =FV( )

04-02 Time Value Review Part 2

Present Value, Compounding Frequency, Continuous Compounding, Effective Rates, Rate of Return, Number of Periods Needed to Achieve a Desired FV

Functions Introduced: =PV( ), =exp( ), =effect( ), =rate( ), =nper( )

04-03 Time Value Review Part 3

Series of Payments, Perpetuity, Annuity, Monthly Payments on Loans

Functions Introduced: =PMT( )

04-04 Time Value Review Part 4

Amortization Tables, Balloon Payments

04-05 Time Value Review Part 5

Future Value of an Annuity, Number of Payments to Accumulate a Future Amount, Working With Uneven Cash Flows, Annual Rate for an Annuity, Number of Payments to Pay Off a Loan

Functions Introduced: =NPV( ), IRR( )

NOTE: The following tutorials are from my previous revision about three years ago, so they have not been updated to Excel 2013, and they were not as heavily edited when they were created as the ones that you have used up to now. However, the content is complete and you should have no problem working through them. I will make the newly updated ones if I get them done in time for this section of the course. -- Dr. Hawley

04-06 Amortization Table Model Part 1

04-07 Amortization Table Model Part 2

04-08 Amortization Table Model Part 3

04-09 Modeling the SML and the Risk-Return Tradeoff

Problems:

Here are 7 sample problems: Time Value problems (PDF)

Use this setup spreadsheet to work the sample problems: Problem Spreadsheet

These videos walk you through solving each of the problems:

Problem 1	Problem 2
Problem 3	Problem 4
Problem 5	Problem 6
Problem 7A	Problem 7B

The solved sample problem spreadsheet is here: Solved Problem Spreadsheet

Also work all of the end-of-chapter problems for Chapter 7:

6 Ed. Problems	6 Ed. Solutions
7 Ed. Problems	7 Ed. Solutions