Homework 2
Theory of Interest
Annuities immediate, due, deferred, continuous, perpetuities

1.Determine the present value of regular payments of $250 to be made at the end of each of the next 50 years. The annual effective interest rate is 5%.

A. 3598B. 3975C. 4136D. 4564E. 4973

2.Find the present value of 50 regular annual payments of $3000 at the beginning of each year, starting now. The annual effective interest rate is 6%.
A. 50,000B. 50,123C. 50,234D. 51,000E. 51,234

3.Find the present value at time 0 of regular payments of $50 at times 25 years, 26 years, and so on, with the last payment at time 40 years. Use an annual effective interest rate of 12%

A. 22.97B. 23.71C. 24.27D. 25.09E.26.00

4. $100 per year is received continuously from time 5 years to time 8 years. Assuming an annual effective interest rate of 4.5%, what is the accumulated value at time 10 years?

A. 250.74B. 275.66C. 300.12D. 325.50E. 350.22

5.Payments of $5000 are received at the end of each year for 10 years, after which payments of $1000 are received at the end of each year forever. The annual effective interest rate is 9%. Determine the present value of these payments.

A. 33300B. 36782C. 37541D. 37759E. 40000

6. A perpetuity-immediate pays $X per year. Brian receives the first n payments, Colleen receives the next n payments, and Jeff receives the remaining payments. Brian’s share of the present value of the original perpetuity is 40%, and Jeff’s share is K. Calculate K.

A. 0.16B. 0.25C. 0.36D. 0.49E. 0.64

7. To accumulate $8000 at the end of 3n years, deposits of $98 are made at the end of each of the first n years and $196 at the end of each of the next 2n years. The annual effective interest rate is i. You are given . Determine i.

A. 11.25%B. 11.75%C. 12.25%D. 12.75%E. 13.25%

8. Connie buys an annuity-immediate from an insurance company. Connie pays $300,000 and in return...

...Gemeinschaftsgefühl. This German word is somewhat difficult to translate to English adequately, though social interest, social feeling, community feeling, or social sense come close. Adler and many of his followers came to prefer the term ‘feeling of community’ (Ansbacher & Ansbacher, 1956, p. 135). Eriksson (1992) views Adler’s writings (as translated by Ansbacher) and the writings of other Adlerians as leading to one definition of this concept: “maintaining an affirmative, optimistic, understanding, and loving attitude to life and self so as to gain a sense of harmony and kinship with a friendly universe and therefore also a loving interest in the interests of others” (p. 277). This definition resonates with my true understanding of Gemeinschaftsgefühl. A person with well-developed social interest strives not for personal superiority but for perfection for all people in an ideal community. Social interest can be defined as an attitude of relatedness with humanity in general, as well as empathy for each member of the human community. Adler sums it nicely as, “to see with the eyes of another, to hear with the ears of another, to feel with the heart of another” (Ansbacher et al., 1956, p. 135). For the time being, this seems to me an acceptable definition of what Adlerians call social feeling. In Adler’s book Understanding Human Nature (1927/2010), believes that social interest is...

...1
Reading notes from Irving Fisher’s The Theory of Interest, 1930
Preface -- It was the misunderstanding of my theory of interest put forward in my 1907
book the Rate of Interest that led me to adopt the catchword “investment opportunity” as
a substitute for the inadequate term “productivity” which had come into general use.
This combined with my early “impatience theory” led to the impatience and opportunity
theory which can be said to be distinct from all other theories of interest because it
explicitly analyzes opportunity and fits together impatience and opportunity and income.
The income concept plays the basic role in the theory of interest. I venture to hope
that the theory here presented, will be found not so much to overthrow as to coordinate
previous theories, and to help in making the chain of explanation complete and strong.
The term “investment opportunity” seems to be the nearest expression in popular
language to suggest the technical magnitude r employed in this book. The full expression
for r is the rate of return over costs, and both cost and returns are differences between two
optional income streams. So far as I know, no other writer on interest has made use of
income streams and their differences, or rates of return over cost per annum.
Part I...

...would begin this progress by comparing a then and now technique as my way of observing my own growth.
In this week’s readings and discussion, I have learned so much about a client’s personal values, beliefs, and world view. Working as a Mental Health Counselor, I’m sure there will be many challenges as well as responsibilities. In week two, I expressed what might be a concern/challenge when working with a client that does not accept accountability. However, being that “I demonstrate and model my values in action with my personal and work behaviors, decision making, contribution, and interpersonal interaction it is my responsibility as a mental health counselor to respect client dignity and promote client welfare. It would be in my best interest, to help my clients to understand that values are made up of everything in their lives which includes influences from family and friends, peers, religious affiliation, education and more”.
I believe that my experience working as a Mental Health Counselor would be tremendously impacted in a positive manner, by my developing a therapeutic alliance, establishing theoretical orientation, self-disclosure, displaying silence techniques as well as adhering to ethical obligation to my clients. I also believe that my own personal attitude, beliefs, biases, behavior, and world view would reflect my abilities to demonstrate professionalism as I refrain from taking anything personal that involves my interaction with my...

...- 2
Theory and Structure of Interest rates
P C Narayan
IIMB PCN BFMS L02
1
Loanable Funds theory
“Market interest Rate is
determined by the factors
that control the supply and
demand for loanable funds”
IIMB PCN BFMS L02
2
1
Demand for Loanable Funds
• Household demand for loanable funds
– As household income rises, so does installment debt
– Inverse relationship between demand for lonable funds
and interest rate
• Business demand for loanable funds
– Inverse relationship between demand for lonable funds
and interest rate
• Government demand for loanable funds
– Interest inelastic since borrowing to meet deficit
• Foreign demand for loanable funds
– Country A issues securities to investors of country B
• Total Demand for lonable funds Da =
Dh + Db + Dg + Df
IIMB PCN BFMS L02
3
Supply of Loanable Funds
• Household sector is the largest followed by
Government and Business (Sa)
• Directly proportional to interest rates
_______________________________________
In equilibrium, Da = Sa
• And the interest rate at this point is is known as
‘equilibrium interest rate’
• Change in demand or supply causes a change in
‘equilibrium interest rate’
IIMB PCN BFMS L02
4
2
Fisher Effect
• Offers an additional explanation to the loanable
funds theory
• Nominal Interest rate
– Compensates for...

...Theories
1
Theories
Individual Counseling Theory Techniques
Lamar University
Theories
2
Theories
Adlerian, Cognitive Behavioral and Solution-Focused Brief Therapy are three major
theories that are used extensively in the counseling world. Some counselors use each
as a single treatment approach while others chose to blend things from two or more
together. The theory or approach that is chosen by a counselor must be one that they
are knowledgeable in and feel comfortable with. It’s also important to remember that
not every approach will fit every client.
Adlerian Theory
Key Concepts
Adlerian Theory sometimes referred to as Individual Psychology was developed
by Alfred Adler. Adler stressed a positive view of human nature. He believed that
everyone can control their fate through analyzing their lifestyle and helping others. One
of the key concepts of Adlerian Therapy is that “objective reality is less important than
how we interpret reality and the meanings we attach to what we experience.” (Quinn,
2011) Adlerian Theory suggests that behavior is purposeful and goal-oriented and that
the “life goal” unifies the personality. (Quinn, 2011) Genetics and heredity are not as
important as what we chose to do with the limitations and abilities that we possess.
(Quinn, 2011) Adler offered a “value-oriented...

...COMPOUND INTEREST
Making or Spending Money
SIMPLE INTEREST FORMULA
If a principal of P dollars is borrowed for a
period of t years at a per annum interest rate
r, expressed as a decimal, then interest I
charged is
I Pr t
This interest is not used very often. Interest is
usually compounded which means interest
is charged or given on the interest and the
principal.
Simple Interest Example
COMPOUND INTEREST
Payment Periods:
Annually
Once per year
Semiannually
Twice per year
Quarterly
Four times per year
Monthly
Twelve times per year
Weekly
Fifty two times per year
Daily
365 (360 by banks) per year
COMPOUND INTEREST FORMULA
The amount A after t years due to a principal
P invested at an annual interest rate r
compounded n times per year is
r
A P 1
n
nt
A is commonly referred to as the
accumulated value or future value of the
account. P is called the present value.
COMPOUND INTEREST
Example:
Investing $1000 at an annual rate of 8%
compounded annually, quarterly, monthly,
and daily will yield the following amounts
after 1 year:
Annually
Quarterly
Monthly
Daily
COMPOUND INTEREST
On-line example
More on-line examples
COMPOUND INTEREST
Tutorial
Continuous Compounding
The
amount A after t...

...
In his 1989 article Mouck cites Morgan (1988) who observed that:
“The idea that accountants represent reality ‘as is ‘ through the means of numbers that are objective and value free, has clouded the much more important insight that accountants are always engaged in interpreting a complex reality, partially, and in a way that is heavily weighted in favor of what the accountant is able to measure and chooses to measure…” (p. 480).
Required:
Discuss the extent to which the “scientific” world-view of mainstream accounting researchers, is grounded on a belief that “reality” exists independently of thee human subject and the possible implications this has for accounting theory development.
Introduction
Accounting is a subject that is guided with principles and regulations. Thus, it is often regarded as a rigid, rigorous, and highly analytical discipline with very precise interpretations. However, this is far from the truth. For instance, two organizations that are otherwise homogeneous can apply different valuation methods giving entirely distinct but equally correct answers. One may argue that a choice between accounting schemes is merely an “accounting construct” the sorts of “games” accountants play that are exclusively of relevance to them but have no pertinent in the “real world.” Once again this is entirely false. For example, valuation of inventory using either LIFO (Last-in-last-out) or FIFO (First-in-first-out) has an impact on income tax,...

...In a broad manner, organisational theories can be defined as formal social organisations and their interrelationship with the environment in which they operate. This reading provides insight into the agency and the contingency organisational theories, and how management implement these theories into the environment in which their business operates. It also outlines the issues and limitations of these theories, using the Coca Cola company as a relevant case study. In addition, this essay examines different stakeholder perspectives in relation to the theories and their issues, and it concluded by focusing on what type of knowledge, capability, and skills a manager requires in order to deal with these specific issues.
Coca Cola was founded during the year 1887, by Doctor John Pemberton, a pharmacist from Atlanta. John established a company which immediately began building its global network, he was known as the man who achieved a “global success through an intelligent risk”. Over the years, the company’s success rate continuously increased, and the deep emotional bond between Coca-Cola and its consumers grew even more powerful and more global (Coca Cola, 2014). In 2014, Coca-Cola advised that the previous year $2.8 billion in stock was purchased, however they had planned to increase that amount to between $3.0 billion and $3.5 billion for the full year, due to positive sales, this is a clear indication...