Financial Math Answers

An amount of R600 is invested every month for eight years. The applicable interest rate is 14,65% per year, compounded quarterly. The accumulated amount of these monthly payments is approximately

[1] R321 200.

[2] R57 600.

[3] R109 300.

[4] R107 500.

[5] R108 400

 Baba Rafi is considering opening a small sandwich outlet inside the NSU campus. It will require  an initial investment of $20,000 and throughout the next 5 years the project will potentially  generate free cash flows in the following form: 

0 

1 

2 

3 

4 

5

-20,000 

6000 

10000 

-4000 

3500 

6500

Now, as we can see an unconventional cash flow in year 3, please calculate the MIRR to decide  whether Baba Rafi should invest in this project or not? The required rate of return is the WACC  calculated in problem 4.

Flare Stock will pay the dividend of $2.4 this year. Its dividend yield is 10%. At what price is the stock selling?

John will save $5000 in 5 years and the bank has promised to give him 8% interest per annum. [compounded] His friend, Lee, has also decided to save the years but the lender to pay him 8% simple interest on the sum A. Calculate how much John will need to put in the bank now to save the $5,000 in 5 year time. B. Why do they get different rate as interest? Explain why. [use effective annual rate (EAR)of interest to answer this question.

Erol invests R8 350 in an amount that pays simple interest. After six years, the amount that he receives back is R12 859. The simple interest rate on the investment, rounded to two decimal places, is

A company paid dividend $12. Company is expected to grow the dividend at 10% per year for next 3 years and then at 6% per year forever. What is the price of stock at the end of third year if your discount rate is 14%? 

Rony will inherit $ 250000 his grandmother in 5 year hence he decided to take a loan now for buy a house for his daughter that will cost 500000 dollars now what amount should he borrow and what will the percentage of down payment pay for the mortgage of house

Tshepiso owes Thapelo R3 000, which is due ten months from now, and R25 000, which is due 32 months from now. Tshepiso asks Thapelo if she can discharge her obligations by two equal payments: one now and the other one 28 months from now. Thapelo agrees on condition that a 14,75% interest rate, compounded every two months, is applicable. The amount that Tshepiso will pay Thapelo 28 months from now is approximately

[1] R20 000.

[2] R14 000.

[3] R11 511.

[4] R11 907.

[5] R11 455.

If 15% per year, interest is compounded every two months, then the equivalent weekly compounded rate is

[1] 14,464%.

[2] 14,837%.

[3] 14,484%.

[4] 14,816%.

[5] none of the above.

Vanessa decides to invest R140 000 into an account earning 13,5% interest per year, compounded quarterly. This new account allows her to withdraw an amount of money every quarter for ten years after which time the account will be exhausted. The amount of money that Vanessa can withdraw every quarter is

[1] R3 500,00.

[2] R1 704,28.

[3] R6 429,28.

[4] R8 594,82.

[5] none of the above