Can you tell me how did they get RM18785.79 as a future value by using a formula? Suppose we should use FVA formula right?***I'm asking about the Uncle Murray questions that promised to give RM1000 a month for 18 months starting today and save it in a bank account that pays 6% compounded monthly.**Thank you for helping me :) 3. The Stein family wants to buy a small vacation house in a year and a half. They expectit to cost RM75,000 at that time. They have the following sources of moneyThey currently have RM10,000 in a bank account that pays 6% compoundedmonthly.Uncle Murray has promised to give them RM1,000 a month for 18 months startingtoday and they save it in a bank account that pays 6% compounded monthly.At the time of purchase, they'll take out a mortgage. They anticipate being able tomake payments of about RM300 a month on a 15-year, 12% loan.In addition, they plan to make quarterly deposits to an investment account to save up anyshortfall in the amount required. How much must those additions be if the investmentaccount pays 8% compounded quarterly? Step3c)2) the given question said that uncleMurray give 1000 every month till 18months and if they deposit in the bank butthe bank gives interest 6% compoundedmonthly isby using excel we getfuture value = ?= FV (rate,nper,pmt pv,type)FV(0.005,18,-1000,0,0)future value = 18,785.79

The future value of annuity is given by FV = E((1+r)^n - 1)/r Where, E = monthly deposit = $1000 r…

Can you tell me how did they get RM18785.79 as a future value by using a formula? Suppose we should use FVA formula right? ***I'm asking about the Uncle Murray questions that promised to give RM1000 a month for 18 months starting today and save it in a bank account that pays 6% compounded monthly.** Thank you for helping me :)

Can you tell me how did they get RM18785.79 as a future value by using a formula? Suppose we should use FVA formula right? *I'm asking about the Uncle Murray questions that promised to give RM1000 a month for 18 months starting today and save it in a bank account that pays 6% compounded monthly. Thank you for helping me :)

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 34P

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Similar questions

Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Now assume that it is several years later. The brothers are concerned about the firm’s current credit terms of net 30, which means that contractors buying building products from the firm are not offered a discount and are supposed to pay the full amount in 30 days. Gross sales are now running $1,000,000 a year, and 80% (by dollar volume) of the firm’s paying customers generally pay the full amount on Day 30; the other 20% pay, on average, on Day 40. Of the firm’s gross sales, 2% ends up as bad-debt losses. The brothers are now considering a change in the firm’s credit policy. The change would entail: (1) changing the credit terms to 2/10, net 20, (2) employing stricter credit standards before granting credit, and (3) enforcing collections with greater vigor than in the past. Thus, cash customers and those paying within 10 days would receive a 2% discount, but all others would have to pay the full amount after only 20 days. The brothers believe the discount would both attract additional customers and encourage some existing customers to purchase more from the firm—after all, the discount amounts to a price reduction. Of course, these customers would take the discount and hence would pay in only 10 days. The net expected result is for sales to increase to $1,100,000; for 60% of the paying customers to take the discount and pay on the 10th day; for 30% to pay the full amount on Day 20; for 10% to pay late on Day 30; and for bad-debt losses to fall from 2% to 1% of gross sales. The firm’s operating cost ratio will remain unchanged at 75%, and its cost of carrying receivables will remain unchanged at 12%. To begin the analysis, describe the four variables that make up a firm’s credit policy and explain how each of them affects sales and collections.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.