Instruction to students: 1. This assignment should be completed individually and neatly. 2. Marks will be given to equations and workings. 3. Plagiarism will be treated seriously. ZERO Marks will be given for assignments that have been found wholly or partly involved in plagiarism (no matter these assignments are from the original authors or from the plagiarists). 4. Answer should be corrected to 2 decimal places if any. 5. Words limit: each essay type part cannot be answered by more than
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financial strategies‚ we must either move all dollar flows back to the present or out to some common future date. CHAPTER OUTLINE I. Compound interest results when the interest paid on the investment during the first period is added to the principal and during the second period the interest is earned on the original principal plus the interest earned during the first period. A. Mathematically‚ the future value of an investment if compounded annually at a rate of i for n years
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expect the money to grow. Growth or in this case savings account‚ the interest rate paid‚ is the amount that we have deposited. Mary has been depositing $500 in her savings account for the last 19yrs‚ which earned %5 per year‚ compounded annually. Mary will make one more $500 deposit one year from now. The goal is to find out how much will Mary’s account will be worth at that time. The initial balance was $500 with an interest rate of %5‚ this means that the end of the first year the balance was
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Mr. Keshav Singh Kansana 1. The product of 2 numbers is 60 and their arithmetic mean in 8‚ find the numbers. 2. The monthly salary of a persona was Rs. 320 for each of the first three years. He next got annul increment of Rs. 40 per month for each of the following successive 12 years. His salary remained stationary till retirement when he found that his average monthly salary during the service period was Rs. 698. Find the period of his service. 3. Divide 36 into 6 parts in A.P such that the sum
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earn interest annually at the rate of 9 percent for seven years. a) How much will Jim have on deposit at the end of seven years? P/Y = 1‚ N = 7‚ I = 9‚ PV = 12‚000‚ PMT = 0 ⇒ FV = $21‚936.47 b) Assuming the deposit earned a 9 percent rate of interest compounded quarterly‚ how much would he have at the end of seven years? P/Y = 4‚ N = 7 × 4 = 28 ⇒ FV = $22‚374.54 c) In comparing parts (a) and (b)‚ what are the respective effective annual yields? Which alternative is better? Because interest in compounded
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practice 1. Calculate the FV of a sum of rs 1000/-invested for 3 years. The rate of interest is 10%. ( Ans 1331/- SNM ) 2. Calculate the FV ( compounded value )‚ if rs 1000/- is compounded @ 10% p.a semi-annually for 3 years. ( Ans 1340/-‚SNM ) 3. Mr investor invests rs 500/- ‚ rs 1000/- and rs 2000/- at the end of each year . Calculate the compound value at the end of 3 years compounded annually when interest is charged at 10% p.a. ( ansrs 3705 /-‚SNM ) 4. Find the compounded value of annuity
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= [1 + (.11 / 365)]365 – 1 To find the EAR with continuous compounding‚ we use the equation: EAR = er – 1 EAR = e.12 – 1 = .1275‚ or 12.75% 23. Although the stock and bond accounts have different interest rates‚ we can draw one time line‚ but we need to remember to apply different interest rates. The time line is: 0 1 Stock Bond $800 $350 360 361 ... 660 … $800 $350 $800 $350 $800 $350 $800 $350 C C C We need to find the annuity payment
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Melissa plans to deposit $2‚000 per year in her account for each of the next 4 years. After that she expects to deposit $4‚000 per year for another 6 years. All deposits are made at the beginning of the year. Interest rates are expected to be 4% for the first 3 years‚ and 5% thereafter. Interest is compounded annually. a. What will Melissa’s balance be at the beginning of year 10 before her last deposit is made? b. What will Melissa’s balance be at the end of year 10? c. How much would Melissa
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Name: __________________________ Date: _____________ 1.|An account is a part of the financial information system and is described by all except which one of the following?| A)|An account has a debit and credit side.| B)|An account is a source document.| C)|An account consists of three parts.| D)|An account has a title.| 2.|Which statement about an account is true?| A)|In its simplest form‚ an account consists of two parts.| B)|An account is an individual accounting record of increases
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member of Team 6: 1. Nguyen Thi Hong Lien (10836) 2. Le Manh Hung (12397) 3. Mai Thi Tuyet Anh (12400) 4. Ly Nam Hung (12389) Chapter 5 Question 1: Interest: 8% Deposit $5‚000 First City Bank applies simple interest: After 10 years‚ we get: $5‚000*8%*10=$9‚000 Second City Bank applies compound interest: After 10 years‚ we get: FV=PV(1+r)t
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