Brother International PDP350CJ Owner's Manual - English - Page 389

Financial Functions The arguments for financial functions are either numbers, field names, or addresses of cells that contain numbers. When the argument is the interest rate, express it as its actual value (for example, enter .07 or 7% rather than 7 to indicate 7%). Be certain to specify the same units for the term and the interest. If the interest is monthly, the term is also monthly. The results of these calculations are always numbers. Enter all values without spaces! Function Description Example CTERM (interest, future value, present value) Number of compoundingterms or periods required for an investment to grow to a future value. Interest is the interest rate for the calculation. Future value is the proposed value of the asset. Presentvalue is the current value of the asset. =CTERM(.05,1000,500) returns 14.2 periods. DDB (cost, salvage, life, period) Double-decliningbalance depreciation of an asset using the double-declining balance method. Depreciation is highest in the first period and decreases in successive periods. Each year's depreciation is a constant percent of the book value of the asset and continues until the book value equals the salvage value. DDB = cost - salvage (total depreciation from previous periods) * 2 / life Book Value is the value of the asset at any given period, taking depreciation into account. Cost is the original cost of the asset. Salvage is the ending value of the asset. Life is the duration of the depreciation, using the same units as Period. Period is the time-period for which the depreciation calculation occurs. Not a cumulative calculation. =DDB(5000,250,60,1) returns $166.67, the depreciation during the first month. =DDB(5000,250,60,2) returns $161.11, the depreciation during the second month. =DDB(5000,250,5,1) returns $ 2000, the depreciation during the first year. FV (payments, interest, term) Returns the future value of a stream of regularly invested payments. For example, if you save $250 every month, you can use FV to calculate how much that will pay of your child's college education which will cost $40,000 in ten years? Payments is the payment made each period. Interest is the interest rate for the same time period as payments. Term is the total number of payments that are made. Be careful to enter the interest rate for the same time period as the payments. =FV(250,.05/12,120) returns $38820.57. To compare the present value with the future value if you invest $500 every month for 10 years at an interest rate of 5%, you would use the following expressions: =FV(500,.05/12,120) returns $77641.14. =PV(500,.05/12,120) returns $47140.68. The formula used by the FV function: FV = payment x & (1 + rate)term -1 rate Appendix 362