Financial Math Answers

I. Find the present and future value of $1000 received every month end for 20 years if the interest rate is J12 = 12% p.a.

II. Find the present value of $10,000 received at the start of every year for 20 years if the interest rate is J1 = 12% p.a. and if the first payment of $10,000 is received at the end of 10 years.

III. John is currently 25 years old. He has $10,000 saved up and wishes to deposit this into a savings account which pays him J12 = 6% p.a. He also wishes to deposit $X every month into that account so that when he retires at 55, he can withdraw $2000 every month end to support his retirement. He expects to live up till 70 years. How much should he deposit every month into his account?

What is the relationship between risk and return? What is the significance of this relationship for the investor?

Dell Camping Equipment, Inc. just issued a 10 percent, pays interest semiannually that matures in 25 years. Investors require 12 percent return for bearing risk of investing in this bond. (5)
i. How much maximum the investors will be willing to pay to purchase Dell bonds?
ii. Calculate the yield-to-maturity of Dell Bondholders assuming the bonds are selling at equilibrium price

Antique Replicas, Inc., has a beta of 1.40, the annual risk free rate of interest is currently 10 percent, and the required return on the market portfolio is 16 percent. The most recent dividend paid by the firm was $3.40. The firm estimates that its dividends will grow at 10 percent next year. The company expects slowing business in year 2 and 3, hence no growth in dividends in these two years. Then, the dividends will continue to increase at an annual compound rate of 5% per year for the indefinite life. Estimate the value of Antique Replicas, Inc., stock.

if one compound interest rate is 12% per annum compounding monthly and another interest rate is 12% per annum compounding weekly. what is the interest rate per period in each case, how many periods per year is there for each type of interest rate and how many periods will there be for 5 years?

1) Explain the following terms and provide example
A. Variable cost vs. Fixed cost
B. Cost driver
C. Direct cost vs. Indirect cost
D. Relevant range
E. Prime cost vs. conversion cost
F. Process costing
2) Write the characteristics of process costing

A sinking fund is established to raise R50000 in ten years time. The fund must also make provision for withdrawals of R800 every half year starting six months from now and finishing three and a half years from now. The one hundred and twenty monthly payments that must be made over the ten year period into an account paying 6.3% p.a Compounded half yearly are equal to ?

A woman had 5000 deduced for tax for every naria he earned in 1973.by the end of the year,he had paid total of 86.25 for the year,how much did he earn during the period?

Regular annual deposit are made into a savings account at the end of each year for 16 years the value of the first deposit is R8000 and thereafter deposit are increased each year from the second deposit onwards at a rate of 3%p.a if the interest rate earned on the savings account is 4.4% p.a compounded monthly what is the future value of the growing annuity?

A sinking fund is established to raise R50000 in ten years time. The fund must also make provision for withdrawals of R800 every half year starting 6 months from now and finishing 3 and half years from now. The one hundred amd twenty monthly payments that must be made over the ten years period into an account paying 6.3%p.a compounded half yearly are equal to?