Intro

It is the end of 2019.You plan to complete a Ph.D. in 5 years. Your favorite uncle haspromised to help you with your school expenses by giving you thefollowing amounts for Christmas:

Year	2020	2021	2022	2023	2024
Cash flow	1,000	1,600	1,800	2,000	2,200

Your uncle is fairlywealthy and very reliable. You currently have $10,000 in a savingsaccount paying an annual interest rate of 6%.

Attempt 1/5 for 10 pts.

Part 1

Create an Excelspreadsheet showing the years and cash flows as in the table above,then add a row that shows the number of years from now and anotherrow that shows the present value of each cash flow. What is the sumof present values?

Hint: do not hardcodethe discount rate into your formulas. Instead, keep it in aseparate cell and refer back to it. You'll be asked to change indiscount rate in parts 5 to 8.

Attempt 1/5 for 10 pts.

Part 2

You also want to knowhow much each gift will be worth in 2024 if you save it. Addanother row to your spreadsheet and calculate the value of eachcash flow in 2024. What is the sum of all future values?

Attempt 1/5 for 8 pts.

Part 3

What is the presentvalue of the sum of future values calculated in the previouspart?

Attempt 1/5 for 10 pts.

Part 4

Now assume that theinterest rate is 4%. What is the present value of all thegifts?

Attempt 1/5 for 10 pts.

Part 5

Still assume that theinterest rate is 4%. What is the future value of all the gifts?

Attempt 1/5 for 10 pts.

Part 6

Now assume that theinterest rate is 10%. What is the present value of all thegifts?

Attempt 1/5 for 10 pts.

Part 7

Still assume that theinterest rate is 10%. What is the future value of all thegifts?