In the previous video, I showed you how to calculate the interest rate behind an investment. In this video, I’ll show you how to discover the amount you’ll receive when you know the length of the investment and its interest rate. To make this calculation, you’ll use the information I just listed and the RECEIVED function.
- [Voiceover] There are many ways to evaluate investments,…but one great way is to determine the amount of money…per investment unit, such as $100;…that you'll receive over and above the discount rate.…The discount rate is usually figured to be…the risk free investment rate,…where you can put your money in a 100% safe security,…such a United States Treasury bill…and receive guaranteed income.…In this movie, I will show you how to calculate…the received value for an investment security…with a given yield, as compared to a discount rate.…
My sample file is Value At Maturity 0503,…and you can find it in the chapter five folder…of your exercise files collection.…And once again, we want to calculate…the extra value or received value for an investment.…You need to know five different things.…The first is the settlement date,…that is when you actually take possession of the security.…Next is the maturity date,…that's the date that the security matures…and a couple of weeks later you receive…your principal back as well as the accumulated interest.…
- Analyzing loans, payments, and interest
- Calculating depreciation
- Determining values and rates of return
- Calculating bond coupon dates and security durations
- Calculating security prices and yields
- Calculating prices and yields of securities with odd periods
Skill Level Intermediate
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Calculating Prices and Yields of Securities with Odd Periods
Additional resources1m 24s
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