FIN 370 Lab Study Guide - All Weeks - Additional Formula (Compound interest) to what amount will the following investments accumulate? a. $5,000 invested for 10 years at 10 percent compounded annually 5000 x (1.10)^10 = 5000 x2.5937 =12968.5 b. $8,000 invested for 7 years at 8 percent compounded annually 8000 x (1.08)^7 = 8000 x 1.7138 = 13710.59 c. $775 invested for 12 years at 12 percent compounded annually 775 x (1.12)^12 = 775 x3.8959 =3019.38 d. $21,000 invested for 5 years at 5 percent compounded annually 21000 x (1.05)^5 =21000x 1.2762 =26801.91 (Compound value solving for n) How many years will the following take? a. $500 to grow to $1,039.50 if invested at 5 percent compounded annually 500/1039.5 =.481 Lookup .48 …show more content…
$500 a year for 10 years discounted back to the present at 10 percent 500 x {1-(1/1.1)10}/.1 = 500 x 6.1445 =3072 (Compound value solving for I) at what annual rate would the following have to be investe a. $500 to grow to $1,948.00 in 12 years 1948/500 = (1+r)12 12 under root 3.896 =1.12 =1.12-1 = .12 or 12% Rate = 12% b. $300 to grow to $422.10 in 7 years 422.1/300 = (1+r)7 7 under root 1.407 =1.05 =1.05-1 = .05 or 5% Rate = 5% c. $50 to grow to $280.20 in 20 years 280.2/50 = (1+r)20 20 under root 5.604 =1.09 =1.09-1 = .09 or 9% Rate = 9% d. $200 to grow to $497.60 in 5 years 497.6/200 = (1+r)5 5 under root 2.488 =1.2 =1.2-1 = .2 or 20% Rate = 20% (Compound annuity) what is the accumulated sum of each of the following streams of payme a. $500 a year for 10 years compounded annually at 5 percent 500x{1.05)10-1}/.05 = 500x12.5778 =6289 b. $100 a year for 5 years compounded annually at 10 percent 100 x (1.10)5-1/.10 = 100 x 6.1051 =610.51 c. $35 a year for 7 years compounded annually at 7 percent 35 x (1.07)7-1/.07 = 35x 8.65 = 302.89 d. $25 a year for 3 years compounded annually at 2 percent 25 x (1.02)3-1/.02 = 25 x 3.06 = 76.51 ditional Formulas stments accumulate? e following take? Compound Interest Calculator Investment Amount Years 4900.00 9 Solution: $10,642.28 Compound Value Solving for n Calculator Investment Amount Future Amount
Variable Costs. Overall the company had favorable variances in variable costs, excluding the efficiency variance. As expected, since Competition Bikes sold less than predicted, their related costs: direct materials, direct labor, manufacturing overhead and variable expenses were less than budgeted amounts showing a favorable variance. The labor and overhead revenue and spending variances however, showed unfavorable due to actual output despite the changes to the flexible budget. With the prediction of decreases costs based on sales, these costs should have also decreased. There is no further information on why these rates were high, Competition Bikes will need to look into those expenses.
b. What is the present value of this annuity if the opportunity cost rate is 10% annually? 10% compounded semiannually?
In Question 6, the payment occurs at the beginning of each period rather than at the end, this type of annuity is named as annuity due.
A person deposited $500 in a savings account that pays 5% annual interest that is compounded yearly. At the end of 10 years, how much money will be in the savings account? (Bluman, A. G. 2005, page 230).
price is $25 per share. The most recent dividend was $1 and the growth rate is 5%.
There are a couple of concerns with Competition Bikes Inc., ProForma for year 9. The first concern is the amount of money that is allocated to research and development. For the previous three years, they have been all over the board with their budgets. The sixth year was $71,460, the seventh year was $98,280, and the eight year was $82,284. This is concerning that the budget has fluctuated so much. In the ninth year they have allocated $85,861. This budget line item should be analyzed so there is not so much variance in the budget between year to year.
a. I = 4%, PV = $74,000, N = 20, FV = $162,143.11 a. Using Excel enter '=-FV(4%,20,,74000) = $162,143.11 salary needed to keep pace with inflation. b. FV = $2 million, N = 25, I = 8%, PMT = $27,357.26 a. Using Excel, enter '=-PMT(8%,25,0,2000000)' = $27,357.26 as the necessary annual payment to be saved. c. PMT = $160,000, N = 20, I = 4%, PV = $2,174,452.22 a. Using Excel, enter '=-PV(4%,20,160000)' = $2,174,452.22 needed for retirement. d. FV = $3.5 million, N = 30, I = 7%, PMT = $37,052.41 a. Using Excel, enter '=-PMT(7%,30,0,3500000)' = $37,052.41 annual payment to be saved.
9. What is the present value of an 8-year annuity that makes quarterly payments of $73 if
Damage to the parked car was $5,400 and damage to the store was $12,650. What amount will the insurance company pay for the damages? What amount will Kurt have to pay?
14) An investment will pay you $100 in one year and $200 in two years. If the interest rate is 5%, what is the
For an individual who pays personal income taxes at a rate of 30 percent, which of the following statements is most correct?
2 Required rate of return on equity is estimated by using CAPM. See Details »
The CEO of Dynamic Manufacturing was at a conference and talked to a supplier about a new piece of equipment for its production process that she believes will produce ongoing cost savings. As the Operations Manager, your CEO has asked for your perspective on whether or not to purchase the machinery.
I for one, know the benefits of having a personal accountant, will definitely be investing in meeting with one. I would much rather be safe than sorry. I might even just meet with one every few months, just to make sure I am on the right track. This could benefit the business community by avoiding debt, and financials crisis. It would help people be more involved in the business community by allowing people to be able to invest in stocks due to the fact they know are comfortable in their
| This assesses a company’s financial durability by examining whether it is at least profitable enough to pay off its interest expenses.