Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Growing annuity ba ii plus

05/12/2021 Client: muhammad11 Deadline: 2 Day

Assume that you are nearing graduation and that you have applied for a job with a local bank. As part of the bank’s evaluation process, you have been asked to take an examination that covers several financial analysis techniques. The first section of the test addresses time value of money analysis. See how you would do by answering the following questions:

For each problem, you need to show your work in order to receive credit. A correct answer with no work shown gets half credit (which means you fail the assignment). An incorrect answer with no work receives 0 credit. With time value of money (TVM) problems, that means showing your inputs for the financial calculator. Make your final answer very clear for the graders. Please don’t make them hunt for your answer.

For example, on 1a, I would show:

N = 3; I/Y = 12; PV = -850; PMT = 0, Calc FV = _______

For uneven cash flows, show CF0 = xx, CF1 = xx F01 = x; CF2 = xx F02 = x, etc.

Show all dollar and percentage values to two decimals ($xxx.xx) and percentage values to x.xx% (be sure to have sufficient decimals showing on your calculator). Rounded answers will receive point deductions.

In some cases, an equation will be easier than using the TVM keys, show your equation if that is the case.

If you use Excel, show what the equation and inputs used.

As with all TVM problems, assume annual compounding unless otherwise specified. Further, assume “regular” annuities (end of period payments) unless specified as “annuities due” (beginning of period payments).

1. (a) If you deposit $200 in the bank today, what is its future value at the end of three years if it is invested in an account paying 12% annual interest, assuming annual compounding? (1 point)

(b) What is the present value of $200 to be received in three years if the appropriate interest rate is 12% (annual compounding)? (1 point)

2. We sometimes need to find how long it will take a sum of money (or anything else) to grow to some specified amount. (a) For example, if a company’s sales are growing at a rate of 18% per year, approximately how long will it take sales to triple? (1 point)

(b) If you want an investment to double in 3 years, what interest rate must it earn? (1 point)

3. (a) What is the difference between an ordinary annuity and an annuity due? (2 points)

(b) What type of annuity is shown in the following cash flow timeline? (1 point)

(c) How would you change it to the other type of annuity? (Think about the cash flows) (1 point)

4. (a) What is the future value of a 3-year ordinary annuity (recall that ordinary annuities have end of year cash flows) of $200 if the appropriate interest rate is 12%? (1 point)

(b) What is the present value of the annuity? (1 point)

(c) What would the future and present values be if the annuity were an annuity due (beginning of year cash flows)? Hint, set your calculator to BGN, there is a video in M2 that shows you how to do this. Don’t forget to reset to “END” after you work an annuity due problem.

(1 pt) PV =

(1 pt) FV =

Note: Look at the difference between an annuity vs. annuity due for the respective PVs and FVs. This relationship is something you will want to remember.

5. What is the present value of the following uneven cash flow stream? The appropriate interest rate is 12%, compounded annually. Note that the final cash flow represents a project where there may be reclamation or other “end of project” costs which are greater than any final income and/or salvage value. (1 point)

6. What annual interest rate will cause $200 to grow to $251.94 in 3 years? (1 point)

7. (a) Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually — holding the stated interest rate constant? Explain your answer. (2 points)

(b-1) What is the future value of $200 after three years under 12% semiannual compounding? (1 point)

(b-2) What is the effective annual rate for 12% interest with semiannual compounding? Be sure to show your EAR answer to 2 decimals, that is xx.xx% (1 point)

Hint: Go to practice problem 26 and review the problem and solution. Also note in Moodle: “Video, how to work Practice Problems #26 & 27). This provides a “click by click” solution for EAR problems using the BAII plus with the equation.

· There are multiple ways to calculate EAR, whichever method you use, you need to show your inputs. If using equation: EAR = ( 1 + APR/m)^m, identify APR and m

· If using the financial calculator’s “ICONV” function, identify NOM, and C/Y

· If using Excel’s “effect” function, identify your inputs and how the equation would look in Excel.

(c-1) What is the future value of $200 after three years under 12% quarterly compounding? (1 point)

(c-2) What is the effective annual rate (EAR) for 12% interest with quarterly compounding? (1 point)

(d-1) What is the future value of $200 after three years under 12% daily compounding? Assume 365 day years and do not do any interim rounding. Just enter the interest rate, divide by 365, hit “=”, then hit your I/Y key (or similar for other calculators). (1 point)

(d-2) What is the effective annual rate for 12% interest with daily compounding? (1 point)

8. Will the effective annual rate ever be equal to the simple (quoted) rate? Explain. (1 point)

9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (1 point)

(b) Switch gears here and now assume that the payments are made annually. What is the annual interest expense for the borrower, and the annual interest income for the lender, during Year 1? (Hint: Go to the TVM lecture notes for multiple cash flows and go to slide 15.) (1 point)

10. Suppose on January 1 you deposit $200 in an account that pays a quoted interest rate of 11.33% (APR), with interest added (compounded) daily. How much will you have in your account on October 1, or after 9 months? (assume N = 273 days) Recall that the interest rate (I/Y) represents the periodic rate based on how many times per YEAR the interest is compounded. Hint, this is 365 times per year. (1 point)

11. Now suppose you leave your money in the bank for 21 months. Thus, on January 1 you deposit $200 in an account that pays a 11.33% compounded daily. How much will be in your account on October 1 of the following year? (assume N = 638 days) (1 point)

12. Suppose someone offered to sell you a note that calls for a $1,000 payment three years from today. The person offers to sell the note for $850. You have $850 in a bank time deposit (savings instrument) that pays a 6.77% APR with daily compounding; and you plan to leave this money in the bank unless you buy the note. The note is not risky—that is, you are sure it will be paid on schedule. Should you buy the note? Check the decision in two ways:

(a) by comparing your future value (FV) if you buy the note versus leaving your money in the bank (FV of the note is $1000, compare this to the FV of leaving $850 in the bank for 3 years with daily interest compounding, should you buy the note?) (1 point)

(b) by comparing the present value (PV) of the note with your current bank investment (PV of the note is PV of the $1000 payout in 3 years assuming the same daily compounded interest as your bank is paying and the PV of your bank investment is the $850, should you buy the note?) (1 point)

(c) Based on parts (a) and (b), do you buy the note or keep your money in the bank? Be sure to explain your answer. (1 point)

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Smart Accountants
Engineering Mentor
Academic Master
Solution Provider
Quick Finance Master
Premium Solutions
Writer Writer Name Offer Chat
Smart Accountants

ONLINE

Smart Accountants

I reckon that I can perfectly carry this project for you! I am a research writer and have been writing academic papers, business reports, plans, literature review, reports and others for the past 1 decade.

$42 Chat With Writer
Engineering Mentor

ONLINE

Engineering Mentor

I reckon that I can perfectly carry this project for you! I am a research writer and have been writing academic papers, business reports, plans, literature review, reports and others for the past 1 decade.

$43 Chat With Writer
Academic Master

ONLINE

Academic Master

I have done dissertations, thesis, reports related to these topics, and I cover all the CHAPTERS accordingly and provide proper updates on the project.

$21 Chat With Writer
Solution Provider

ONLINE

Solution Provider

I can assist you in plagiarism free writing as I have already done several related projects of writing. I have a master qualification with 5 years’ experience in; Essay Writing, Case Study Writing, Report Writing.

$23 Chat With Writer
Quick Finance Master

ONLINE

Quick Finance Master

I am a PhD writer with 10 years of experience. I will be delivering high-quality, plagiarism-free work to you in the minimum amount of time. Waiting for your message.

$16 Chat With Writer
Premium Solutions

ONLINE

Premium Solutions

As an experienced writer, I have extensive experience in business writing, report writing, business profile writing, writing business reports and business plans for my clients.

$44 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Calvinist undercurrent - Cable cross sectional area calculator - Business research management - 2015 hsc business studies - Separation of photosynthetic pigments by paper chromatography lab report - Tate's digital transformation case solution - Electric field mapping lab report answers - Budget - Bringers of the dawn spinning exercise - Cmit 265 network design proposal - Cengage learning boston ma - Elementary Stastics - Caroline bowen minimal pairs - Ethical hacking - Pcs property cleaning services - The armadillo poem analysis - Underline the collective nouns - BUSN 602 Week 8 forum - Galeria indigena puerto vallarta - Authorization letter for psa - Cohesive paper - What is the book they say i say about - NURS-6050N-66/NURS-6050C-66-Policy & Advocacy - Good to great the hedgehog concept - Balance sheet assignment - BW Texas Gov't Topic 8.1 and 8.2 - Compare and contrast essay andrew jackson and michael rutledge - Home work 6 - Beastie bay school magic word - Practice Experience: Applying Key Interventions to a Practice Problem CLASBI - Christian dior financial statements - Discovery phase in data analytics - New employee induction checklist template - Nike goods and services offered - Boyle's law data table - Sodium hydroxide is a common one crossword clue - Nutritional Side Effects of Cancer Treatments - Prospective short circuit current formula - Scott v coulson 1903 - Oxford big ideas humanities 8 publisher - UTERINE FIBROIDS - Mercedes sprinter windscreen replacement cost - Bio magnetic ear stickers for weight loss information - Pediatric soap note well child - Seeing the world through strengths colored glasses means - St luke's south melbourne - What is the magnitude f of the force? express your answer numerically in newtons. - Nursing paper - Left for dead beck weathers summary - 150 words to describe the taste of food - For the past several years steffy lopez answer - Hypothetico deductive method ppt - CCIS - Princ of Mngmnt Final Paper Review - Benny goodman carnegie hall 1938 youtube - Networks an introduction 2nd edition - Literature homework - Design thinking ppt presentation - Differentiate log base 10 - Mood worksheet 1 answer key - How would you define customer satisfaction planet fitness - Charles perrault sleeping beauty analysis - Improving your writing penn foster exam - Evaluation of the research study - D meter floor flatness - Case study opening your new dunkin donuts locations - A long term financial plan begins with - Characteristics of natural approach - Why are skills audits important - Example of a self critique for speech - Curve sketching homework answers - The american family by stephanie coontz - 2 marks for software engineering questions and answers - LOOKING FOR A 100% PSYCHOLOGY MAJOR TUTOR - Epidemiology Discussion 1 - Freedom writers comprehension questions - Panera bread company case study answers - N2o2 2 lewis structure - SWOT Assignment - Hoppers crossing radiology 267 heaths road - Discussion Question 1 week 5 - Micro focus net express - 2 page outline on ethical issues surrounding public defenders - When diluting an acid always pour - 156.5 cm in feet - Content writing - Nursing management of gastroesophageal reflux disease - Briefly explain how the upper castes are educated at eton - Contraindications for a facial - If poisonous minerals and if that tree analysis - Crocodile swallow peter pan - Royal college of surgeons in ireland notable alumni - How to find standard deviation on casio fx-82au plus ii - Ic 400 pro mods - 1200 most used words in english - The rushmore group llc - ERM - Biotic factors of a rainforest - Environmental Sustainability - Interpersonal communication in the workplace a largely unexplored region - Continuous auditing and continuous monitoring