kellywy
Board Regular
- Joined
- Aug 5, 2006
- Messages
- 123
I have a currency valuation problem that I can't seem to figure out which type of formula it needs (I've tried a couple and the numbers don't seem to come out right.) Was hoping if I tried to explain what I'm trying to do, someone with a much more mathematical-mind could help me figure it out! 
Here's the facts:
1) I need to make a choice between accepting a full cash settlement - or a part cash settlement, plus a set amount of future payments towards a monthly obligation (club dues) at a 10% discount (over a period of 12, 24, and 36 months).
2) Assuming that if I chose the a full cash settlement, I can earn interest on that amount at a rate of 7% per year. (I can calculate this number with a FV formula.)
3) On the "payments with discount" part of the settlement - assume the following cell numbers/figures:
A1: The initial cost of investment is $4,017.60. (sum of $111.60*36 months)
A2: The Annual Return on funds is $1,488.00. (monthly=$124)
A3: The 10% discount is applied to annual return of $1,488. (i.e., instead of having my monthly payments applied at $124 -- it will be applied at $111.60.)
A4:A39: List of months 1-36.
4) So my questions are:
(a) I'm trying to show on paper the best option to pick - but can't tell if this is a NPR, FV, IRR formula - or something else...?
(b) At what month during the 36 month period is my break-even between the two options? (i.e., accepting settlement of part cash/part discounted payment over 3 years, vs. all cash now with probable investment return of 7% per year)
I would SOO appreciate any help. My questions aren't usually this convoluted -- but now this one has me truly stumped!
Kelly
Here's the facts:1) I need to make a choice between accepting a full cash settlement - or a part cash settlement, plus a set amount of future payments towards a monthly obligation (club dues) at a 10% discount (over a period of 12, 24, and 36 months).
2) Assuming that if I chose the a full cash settlement, I can earn interest on that amount at a rate of 7% per year. (I can calculate this number with a FV formula.)
3) On the "payments with discount" part of the settlement - assume the following cell numbers/figures:
A1: The initial cost of investment is $4,017.60. (sum of $111.60*36 months)
A2: The Annual Return on funds is $1,488.00. (monthly=$124)
A3: The 10% discount is applied to annual return of $1,488. (i.e., instead of having my monthly payments applied at $124 -- it will be applied at $111.60.)
A4:A39: List of months 1-36.
4) So my questions are:
(a) I'm trying to show on paper the best option to pick - but can't tell if this is a NPR, FV, IRR formula - or something else...?
(b) At what month during the 36 month period is my break-even between the two options? (i.e., accepting settlement of part cash/part discounted payment over 3 years, vs. all cash now with probable investment return of 7% per year)
I would SOO appreciate any help. My questions aren't usually this convoluted -- but now this one has me truly stumped!
Kelly
