GROUP ASSIGNMENT COVER SHEET

STUDENT DETAILS

Student name: Đinh Hoàng Minh Đức Student ID number: 31201029022

Student name: Võ Huỳnh Cẩm Ly Student ID number: 31201028989

Student name: Nguyễn Thị Vương Trinh Student ID number: 31201029200

Student name: Lê Thảo Như Student ID number: 31201029162

Student name: Trần Thanh Trúc Student ID number: 31201028790

UNIT AND TUTORIAL DETAILS

Unit name: Mathematics for Business Unit number:

Tutorial/Lecture: Class day and time:
Lecturer or Tutor name:
ASSIGNMENT DETAILS

Title: Assignment 1
Length: Due date: Date submitted: 2/5/2021

DECLARATION
I hold a copy of this assignment if the original is lost or damaged.
I hereby certify that no part of this assignment or product has been copied from any other student’s work or from
any other source except where due acknowledgement is made in the assignment.
I hereby certify that no part of this assignment or product has been submitted by me in another (previous or
current) assessment, except where appropriately referenced, and with prior permission from the Lecturer /
Tutor / Unit Coordinator for this unit.
No part of the assignment/product has been written/ produced for me by any other person except where
collaboration has been authorised by the Lecturer / Tutor /Unit Coordinator concerned.
I am aware that this work may be reproduced and submitted to plagiarism detection software programs for the
purpose of detecting possible plagiarism (which may retain a copy on its database for future plagiarism
checking).

Student’s signature: Đức

Student’s signature: Ly
Student’s signature: Trinh
Student’s signature: Như
Student’s signature: Trúc
Note: An examiner or lecturer / tutor has the right to not mark this assignment if the above declaration has not been
signed.
 1. EFFECT
- Functions:
Through the EFFECT function, we can understand the effective annual interest rate. When we have the
nominal interest rate and the number of compounding per year, it becomes easy to find out the effective
rate.
- How to use EFFECT formula in excel:
+ Calculates the effective annual interest rate.
+ Syntax: =EFFECT (nominal_rate, npery)
- Example: Suppose we are given the data below:

The formula to use is:

2. Internal Rate of Return (IRR)

- Functions:
+ To understand whether any new project or investment is profitable or not, the firm uses IRR. If IRR is
more than the hurdle rate (acceptable rate/ average cost of capital), then it’s profitable for the firm and vice-
versa.
+ IRR is the annual rate of growth an investment is expected to generate.
+ IRR is calculated using the same concept as NPV, except it sets the NPV equal to zero.
- How to use IRR formula in excel:
+ Syntax: =IRR (Values, [Guess])
 Example: An initial investment of $50 has a 22% IRR. That is equal to earning a 22% compound annual
growth rate.
3.Future Value (FV)
1. What is future value?
The Excel FV feature is a financial mechanism that returns an investment's potential worth. To
obtain the future value of an investment, you can use the FV function, assuming periodic, continuous
payments with a constant interest rate.
2. FV Function Syntax
=FV(rate,nper,pmt,[pv],[type])
3. Arguments
rate – It’s the interest rate for each period.
nper – It’s the total number of payment periods.
pmt – It’s the payment per period.
pv - [optional] The present value of future payments. If omitted, assumed to be zero. Must be
entered as a negative number.
type - [optional] When payments are due. 0 = end of period, 1 = beginning of period. Default is 0.
4. Example
We deposited $1,000 into a savings account for 4 years. The interest from this was 8% annually,
which was multiplied on a monthly basis and without any extra fees. As a monthly interest rate, the
annual interest rate is converted into monthly interest, 8 percent (annual interest rate) / 12 (months
a year) = 0.67 percent and the amount of payments per year is converted into the monthly number
of payments as
NPER – 5 (years) * 12 (months per year) = 60
No regular payments are being made, so the value of pmt argument is
PMT = 0
The formula used for the calculation is:
=FV(D7,D8,D9,D10,D11)
4.PMT
1. What is PMT?
The PMT function in Excel is a financial function that returns periodic loan payments. Provided the
loan size, number of times, and interest rate, you can use the PMT feature to work out payments for
a loan. For instance, PMT will tell you what your monthly payments are and how much principal and
interest you pay per month if you borrow $10,000 on a 24-month loan with an annual interest rate
of 8 percent.
2. PMT Syntax
=PMT (rate, nper, pv, [fv], [type])
3. Arguments
rate - The interest rate for the loan.
nper - The total number of payments for the loan.
pv - The present value, or total value of all loan payments now.
fv - [optional] The future value, or a cash balance you want after the last payment is made. Defaults
to 0 (zero).
type - [optional] When payments are due. 0 = end of period. 1 = beginning of period. Default is 0
4. Example
Suppose the volume of the loan is 25,000, and the annual interest rate is 10 percent, and the
duration is 5 years. The number of payments here will be in sum = 5* 12= 60 payments. We have
considered C4/12 in this PMT excel, since a 10 percent average is annual, and we get the monthly
rate by splitting by 12. Here, zero is called the future value.
 PMT= $531.18

5.NPER (Number of Periods)

- Functions:
+Returns the number of periods for an investment or a loan based on periodic
+Constant payments and a constant interest rate.
- How to use NPER formula in Excel:
+ The NPER formula includes Rate, PMT, PV, [fv], [type].
+ For example:
Calculate payment periods for loan

Generic formula
=NPER(rate, payment, -loan)
In the example shown, the formular in C10 is =NPER(C6/12,C7, -C5)

6.PPMT
- Functions:
+ The function will calculate the payment on the principal for a loan or an investment based on periodic,
constant payments and a fixed interest rate for a given period of time.
+In financial analysis, the PPMT function is useful in understanding the primary components of total
payments made for a loan taken.
- How to use PPMT Formula in Excel:

+ Type: =PPMT (rate, per, nper, pv, [fv], [type])

Rate: The interest rate per period
Per: The payment period of interest
NPER: The total number of payments for the loan
PV: The present value, or total value of all payments now
FV: [optional] The cash balance desired after last payment is made. Defaults to 0
Type: [optional] When payments are due. 0=end of period. 1= beginning of period. Default is 0

7.NPV (Net Present Value)

-Functions:
+To calculate the Net Present Value of a series of cash flows based on a specified discount rate.
+Can be used for financial analysis and financial modeling when determining the value of an investment.
-How to use NPV formula in Excel:
+ Set a discount rate in a cell.
+ Establish a series of cash flows (must be in consecutive cells).
+ Type “=NPV(“ and select the discount rate “,” then select the cash flow cells and “)”.

8.Nominal
-Function: to calculate the nominal interest rate, given an effective annual interest rate and the number
of compounding periods per year.
- How to use Nominal formula in Excel: Type “=NOMINAL(effect_rate, npery)
+ effect_rate: The effective annual interest rate (should be a number between 0 and 1)
+ npery: Number of compounding periods per year (should be an integer)
9.XNPV
Definition:
The XNPV function in Excel uses specific dates that correspond to each cash flow being discounted in a
period.
Formula:
=XNPV(Rate, Cash Flows, Dates of Cash Flow)

 Rate    Required. The discount rate to apply to the cash flows.

 Values    Required. A series of cash flows that corresponds to a schedule of payments in dates.

 Dates    Required. A schedule of payment dates that corresponds to the cash flow payments. XNPV is
calculated as

where:

 di = the ith, or last, payment date.

 d1 = the 0th payment date.
 Pi = the ith, or last, payment.

Example

10.XIRR
Definition:
This function will calculate the Internal Rate of Return (IRR) for a series of cash flows that may not be
periodic.
Formula:
=XIRR(values, dates,[guess])

 Values    Required. A series of cash flows that corresponds to a schedule of payments in dates.

 Dates    Required. A schedule of payment dates that corresponds to the cash flow payments.

 Guess    Optional. A number that you guess is close to the result of XIRR.

XIRR is calculated as

where:

 di = the ith, or last, payment date.

 d1 = the 0th payment date.
 Pi = the ith, or last, payment.

Example