Financial Math Answers

Mapuleng deposit 1500 at the end of every month into an account that earns 12.5% interest per year,compounded monthly. After two years, she stops making this monthly contributions because the interest rate changes to 15% per year compounded every two months. if no withdrawals or deposits are made for four years the balance in the account will be

To pay off a loan of 7000 due now and a loan of 2000 in 14 month's time olarato agrees to take three payments in two, 5 and 10 months time respectively. The second payment is to be double the first and the third payment is to be triple the 1st. what is the size of the payment at month 5 if interest is calculated at 16% per year compounded monthly

Lindiwe decides that she would like to buy her daughter, Mbali, a car when she turns 21 in six years' time. She deposits R6 000 each month into an account earning 8,94% interest per year, compounded monthly. The amount that Lindiwe (rounded to the nearest rand) will have available six years from now is

6 years ago on Olwethu lent happy 150,000 on condition that you will pay her back in 9 years time. The applicable interest rate is 15.5% per year compounded mothly.Happy also owes Olwethu another amount of 250,000 that he has to pay back six years from now for a loan that earned interest at 16.4% per year compounded semi-annually.happy asks Olwethu if he can settle both his debts three years from now.The total amount that happy will have to pay all way to 3 years from now is

The smart treasure fund was credited for Samson after he lost his leg in a battle with Pirates the fund was undertaken to pay him 1200000 now Samson prefers to receive three payments one 3 years from now: one twice the size of the first payment 6 years from now, and one four times the size of the first payment 10 years from now. The amount of money to the nearest rent that Samson can expect to receive 6 years from now if the interest rate applicable is 8.6% per year compounded quarterly will be?

A company is considering an investment proposal to install new milling controls. The project will cost Kshs 50,000,000. The facility has a life expectancy of five years and no salvage value. The company’s tax rate is 40%. The estimated cash flows from the proposed investment proposal are as follows:

Year CF Kshs 000

1 13,000

2 14,000

3 18,000

4 23,000

5 25,000

Compute:

a. Accounting Rate of Return (2Marks)

b. Discounted payback period at 6% discounting factor (4 Marks)

c. Net present value at 15% discounting factor and advise management on the project’s feasibility ( 4 Marks)

brooke pays $239.52 for a car lease at the beginning of every quarter for 5 years and 9 month at 4.46% compounded quarterly what type of annuity is this

When pacific inc. Bid for a project with the government the company was offered the following two payment options

a) A payment of $540,000 at the end of 5 years. Which is the scheduled completion time for the project

b) $80,000 paid upfront at the beginning of the project and the balance payment in 5 years.

If the two payments are financially equivalent and the interest rate is 6.00%

Compounded quarterly. Calculate the balance payment offered in ( option b) round to the nearest cent

An investment of $ 18,000 is growing at 5% compunded quarterly

a) calculate the accumulated amount of this investment at the end of year 1 Round of the nearest cent

b) if the intrest rate changed to 3% compounded monthly of the year 1, calculated the accumulated amount of this investment at the end of year 2 round of the nearest cent

c) Calculate the total amount of interest earned from the investment during the 2 year- period round of the nearest cent.

Calculate the effective interest rate for each following normal interest rates

a) 3% compounded quarterly. Round to two decimal point

b) 3% compunded month. Round to two decimal point