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Mba Fin Assignment

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Submitted By elenayeudau
Words 1029
Pages 5
HANH DANG
ID 1236466
ASSIGNMENT 1
CHAPTER 4
4-8
Present Value (PV) = $20,000
Time : 5 years = 60 months
Interest Rate : 12% = 1% per month
The monthly loan payment is
FV = PV (1+I)^N = $-20000 (1+ 0.01) ^60 = $444.89
EFF% = (1+I/M)^M – 1 = (1 + 0.12/12)^12 – 1 = 1.1268 – 1 = 0.1268
The loan’s EFF % = 12.68%
4-10
a. FV = PV (1 + I)^N = $500 (1+ 0.06) ^ 10 = $895.42 b. FV = $500 (1+0.12)^10 = $1552.92 c. PV = $500 / (1+0.06)^10 = $279.20 d. PV = $500 / (1+ 0.12)^ 10 = $867.13
4-11
a. At 7%
FV = PV ( 1+ I) ^N
400 = 200 (1+0.07)^N
2 = (1+0.07)^N
Ln 2 = Nln (1.07)
N = ln 2 / ln 1.07 = 10.2448 = 10 years b. At 10%
400 = 200 (1+0.1)^N
2 = (1.1)^N
N = ln 2 / ln 1.1 = 7.2725 = 7 years c. At 18%
400 = 200 (1+0.18)^N
N = ln2 / ln 1.18 = 4.1847 = 4 years d. At 100%
400 = 200 (1+1)^N
N = 1 year
4-12
a. PV = 400
N = 10
I = 10%
FVA = PMT 1+0.1N0.1- 10.1 = $400 (15.93742) = $6374.97 b. PV = $200
N = 5
I = 5%
FVB = $200 (5.5256) = $1105.13 c. PV = $400
N = 5 years
I = 0%
FVC = $400 (5) = $2000 d. Annuities Due (a) FV = FVA (1+I) = $6374.97 (1+0.1) = $7012.46 (b) FV = $1105.13 (1+0.05) = $1160.38 (c) FV = $2000 (1) = $2000
4-14
a. PV of cash stream A and B
PVA = 100(1+0.08)+ 4001+0.082+4001+0.083+ 4001+0.084+ 300(1+0.08)^5 = $92.59 + $342.93 + $317.53 + $294.01 + $204.175 = $1251.25 PVB = 300(1+0.08)+ 4001+0.082+4001+0.083+ 4001+0.084+1001+0.085 = $ 277.77 + $342.93 + $317.53 + $294.01 +$ 68.05 = $1300.29 b. I = 0%
PVA = $100 + $400 + $400 + $400 + $300 = $1600
PVB = $300 + $400 +$400 + $400 + $100 = $1600
4-16
a. Annually
PV = $500
I = 12%
N = 5 years
FV = $500 ( 1+ 0.12)^5 = $881.17 b. Semiannually
PV = $500
I =12% / 2= 6%
N= 5 * 2 =10
FV = $500 (1+ 0.06)^10 = $895.42 c.

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