Business

FinanceQ&A LibraryYour company has decided to set up a fund for its employees with an initial payment of Rs 27,500 compounded six-monthly over a four-year period at a six monthly interest of 3.5%.(a) Calculate the size of the fund at the end of 4 years.(b) Calculate the effective annual interest rate.iv) Show that P = A/r. for an ordinary annuity to infinity.Question

Your company has decided to set up a fund for its employees with an initial payment of Rs 27,500 compounded six-monthly over a four-year period at a six monthly interest of 3.5%.

(a) Calculate the size of the fund at the end of 4 years.

(b) Calculate the effective annual interest rate.

iv) Show that P = A/r. for an ordinary annuity to infinity.

Find answers to questions asked by student like you

Q: Using the P/E multiples approach to valuation, What is the estimated price of a stock if the firm’s ...

A: Calculation of estimated price of stock:Answer:Expected price of stock is $82.26

Q: Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financin...

A: Calculation of Amount Saved each month due to lower Monthly Payment:The amount saved each month due ...

Q: Executives at XYZ Corporation realize that they have too much liquid assets. They want to use this c...

A: Calculation of Expected rate of Return and Standard Deviation of the each company using Excel: Expec...

Q: Try to calculate the effective interest rate for a $1789 simple discount note at 5.25% for 15 months...

A: Computation of the effective interest rate:Hence, the effective interest rate is 5.62%.

Q: An investor owns $5,000 of Adobe Systems stock, $2,000 of Dow Chemical, and $9,000 of Office Depot. ...

A: Hence, the total weight of portfolio is $16,000 is obtained by adding the investment made by the inv...

Q: Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financin...

A: Computation of the equity:Hence, the equity is $91,752.

Q: Explain the disadvantages and dangers of Home Equity Loans.

A: The disadvantages of home equity loans:Higher rate of interest: The interest rates are typically hig...

Q: Topic: Payout Policy What are the drawback(s) of distributing dividends instead of retained earnings...

A: The dividend policy is a decision in deciding the exchange between paying dividends and retaining ea...

Q: 5. A dress regularly sells for $141. The sale price is $104. Find the percent decrease of the sale p...

A: Regular price, P = $ 141Current price = S = $ 104Decrease of sale price = P -S = 141 - 104 = $ 37