FN 215 – Financial Management

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Question

FN 215 – Financial Management

Problem Set # 5

(Due: Monday,
October 20, 2014)

Rules for all
problem sets:

·
Do
your own work. Do not copy material from
others.

·
Problem
sets must be submitted in hard copy form.
Do not submit electronically.

·
Show
all work and/or explain your answers.

Answer
all 6 questions.

Question 1

The
initial investment is $30,000. Annual interest rate is 4.75%. Maturity: 16 years. Using the equation/calculator method,
determine the “future value” for each of the following scenarios. You may round
to the nearest dollar.

A.
Annual
compounding

B.
Quarterly
compounding

C.
Monthly
compounding

D.
Continuous
compounding

Be
sure to show all equations.

Question 2

Same
inputs as Question 1, but use Excel.
Attach a hard copy of the Excel spreadsheet. Be sure this spreadsheet print out the actual
formulas and answers. Answers should be rounded to nearest penny.

Question 3

You
will receive $1,000,000 lump-sum, 25 years later. The discount rate is 3.25%. Using the equation/calculator method, determine
the “present value.” Show the equation.

Question 4

Interpret
your result from Question 3.

Question 5

Calculate
the “present value” for the following annuity: $40,000/year, 25 years, discount
rate 5.5%. Use equation/calculator method.

Question 6

Same
inputs as Questions 3 & 5, solve by Excel.
Attach hard copy of Excel spreadsheet showing actual formulas and
answers. Round answers to nearest penny.

FN 215 – Financial Management
FN 215 – Financial Management

[author] [author_image timthumb=’on’]http://www.courseshero.us/wp-content/uploads/2017/04/office-594132_1280.jpg[/author_image] [author_info]accountsguru answered this question, this tutor was rated 20245 times with a rating of 4.8 out of 5 based on 20245 customer reviews.[/author_info] [/author]


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…$ xxxxxx (C) xxxxxxx Compounding = x 85% Future xxxxx = x xxxxxx (D) xxxxxxxxxx Compounding = xxx 82% (Formula x e x x t) xxxxxx Value…

2340011.xlsx (10.79 KB)Preview: result, xx means xxxxx if invest xxxxxxxx and keep xxxx invested xxx xx yearsat xxx rate of x 25%, it