Financial Math Answers

You buy a computer directly from the manufacturer for R7332,00 and agree to repay it in equal installment over 3 years at the end of each month, starting one month from now. The interest rate is 10.7% per year, compounded monthly. How much will you pay in total?

A home was bought with a 20%down payment of 177175,00. The balance was financed for 20 years at 9.4 %interest per annum, compounded semi-annually. Find the size of the half yearly payment for the loan.

Growth Tech Inc., has earned $ 40 as Earnings Per Share. It proposes to pay $10 as dividend and reinvest the remaining. The return on investment by the firm is 20%. What is the growth rate of the firm’s earnings and dividends assuming a constant payout ratio and return on investment?

The following information is given with respect to the ratio's of two companies

Aman Ltd Roger Ltd

Current ratio 2:01 1.60:1

Quick Ratio 1.35:1 1:01

Return on investment 15% 13%

Debt Equity Ratio 2.5:1 1:01

a. Define the concepts of Current and Quick ratio’s and also, reflect on your understanding

towards the financial performance of the companies by looking to the above information

(2marks for defining and 3 marks for interpretation and reasoning).

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Love Doddle is a gifting enterprise of Ms. Dorati. The enterprise generates inflows by

arranging gift hampers for the customer's loved ones. The inflows arises from the sale of

gift hampers Rs 505000 and from bank interest, dividend receipt Rs4200. Ms. Dorati is

confused on how to record these inflows. She would like to understand from you about

the concepts Revenue from operation and other income, so that she can record the

information so as to prepare the profit and loss statement of the enterprise. Define, share

examples, and elaborate on your understanding towards the terms Revenue from

Operation and Other Income.

I want elaborated answer of this question

Love Doddle is a gifting enterprise of Ms. Dorati. The enterprise generates inflows by

arranging gift hampers for the customer's loved ones. The inflows arises from the sale of

gift hampers Rs 505000 and from bank interest, dividend receipt Rs4200. Ms. Dorati is

confused on how to record these inflows. She would like to understand from you about

the concepts Revenue from operation and other income, so that she can record the

information so as to prepare the profit and loss statement of the enterprise. Define, share

examples, and elaborate on your understanding towards the terms Revenue from

Operation and Other Income

you want to buy a car, and a local bank will lend you $20,000. The loan will be fully amortized over 5 years(60 months), and the nominal interest rate will be 11% with interest paid monthly. What will be the monthly loan payment? What will be the loans EAR?

Priyo Prangon Group has the following capital structure, which it considers optimal:

Mortgage Bonds, ($1000 par) $ 30,000,000

Preferred stock, ($100 par) $ 25,000,000

New Common stock ($40 par) $ 50,000,000

Retained earnings $ 30,000,000

$ 135,000,000

Company issued l,000 tk; 8.5%, 15-year bond whose net proceeds are Tk. 955.The tax rate is

35%. Company has preferred stock that pays a $15 dividend per share and sells for $150 per share in

the market. Company’s stock is $165. The dividend to be paid at the end of the coming year is $18

per share and is expected to grow at a constant annual rate of 6% and its flotation cost is 4%. Assume

the Government Treasury bill rate (risk free rate) is 7%. The Abul Khair Group stock’s beta

coefficient (β) is 1.5 and the rate of return on the market portfolio is 12%

Andile deposits R900 into a savings account paying 6,5% interest per year, compounded quarterly. After three and a half years he withdraws R1 000 from the account and deposits it into a second account paying 11% simple interest per year.

A number of years after Andile deposited the R1 000 into the second account, the accrued amount in the second account is R1 605. The time (correct to two decimal places) the money was invested for, is

[1] 4,36 years.

[2] 5,50 years.

[3] 9,31 years.

[4] 4,53 years.

[5] none of the above

Andile deposits R900 into a savings account paying 6,5% interest per year, compounded quarterly. After three and a half years he withdraws R1 000 from the account and deposits it into a second account paying 11% simple interest per year.

How much is the total amount accrued in the first account two years after withdrawing the R1 000? The correct answer, rounded to the nearest rand, is

[1] R145.

[2] R1 105.

[3] R605.

[4] R128.

[5] none of the above