Financial Math Answers

1. James invested 150,000.00 at 2.5% interest compounded semi-annually. Find the maturity value if he invests for (a) 4years? (b) 8years? (c) How much is the additional interest earned due to the longer time?

manufacturer of microcomputer produces three different models. The following table summarizes wholesale process, material cost per unit and labor cost per unit. Annual fixed costs are $ 25 million.

Microcomputer

Model 1

Model 2

Model 3

Wholesale price per unit

$500

$1,000

$1,500

Material cost per unit

$175

$400

$750

Labor cost per unit

$100

$150

$225

Determine a joint total revenue function for sale of the three different microcomputer models?

Determine an annual total cost function for manufacturing the three models.

Determine the profit function for sales of the three models.

A manufacturer of microcomputer produces three different models. The following table summarizes wholesale process, material cost per unit and labor cost per unit. Annual fixed costs are $ 25 million.

three models.

What is an annual profit if the firm sells 20,000, 40,000 and 10,000 units, respectively of the three models?

If P20,000 will accumulate to P45,758.55 in 4 years, what is the interest rate compounded semi-annually?

If P20,000 will accumulate to P45,758.55 in 4 years, what is the interest rate compounded semi-annually?

monthly payment of 5,000 for 5 years that will start 7 months from now?

Janny opened a savings account and deposited $300.00 as principal. The account earns 6% interest, compounded annually. What is the balance after 6 years?

Your statement date is every 4^th day of the month. You made a purchase on April 3. When is the statement date for the said purchase?

[C] The marketing department of Spager Ltd estimated that if the selling price of product is set at $15 per unit then the sales will be 50 units per week, while, if the selling price is set at $20 per unit, the sales will be 30 units per week. Assume that the graph of this function is linear. The production department estimates that the variable cost will be $5 per unit and that the fixed cost will be $50 per week, and special cost are estimated as $0.125x2, where x is the quantity of output. All production is sold.

(a) Show that the relationship between price (Pr) and quantity sold (x) , are given by the equation Pr = 27.5 - 0.25x.

(b) Find the revenue function, R.

(c) Find the total cost function (C).

(d) Advise the company on production and pricing policy if it wishes to maximize profits, and find the maximum profit.

A company’s dividend growth rate is 10% the discount rate is 8%, there are 20 years of dividend to be paid and the current dividend is $10. What is the value of the stock based on the constant growth model?