Cost of Capital^37
done at the end of the period 1. Note that in the earlier case this also means that we get
the returns at the end of the period 20 simultaneously when we make the last payment.
Putting these values we get the following screen.
Can you find the answer? Yes, it is Rs 231,461.68 a difference of Rs 0.32 from the
answer we got using the table above.
A variation on this would be that the payment made at the start of the period instead of
the end of the period. This means that you earn extra interest for one year. The formula
is slightly different in that the whole value is multiplied by (1+i) resulting in the following
formula:
Future Value = [(^1 )^1 ]( 1 i)
iA in +
+ -In the excel spreadsheet we just have to change the type to 1 to get the desired
result.
The result now comes to Rs 243,034.76, which is nothing but the earlier figure of The
result now comes to Rs 2,43,034.76, which is nothing but the earlier figure of Rs
2,31,461.68 multiplied by 1.05 (i.e. 1+i).