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{F} (C) An individual purchases a car for $15,000. The purchaser takes out a loan for this amount that involves him making 24 monthly payments in advance. The annual rate of interest is 12.36% per annum effective. Calculate the flat rate of interest on the loan.
(D) (a) A forward contract with a settlement date at time T is issued based on an underlying asset with a current price of B.
The annualised risk-free force of interest applying over the term of the forward contract is δ and the underlying asset pays no income. Show that the theoretical forward price is given by K = BeδT , assuming no arbitrage.
(b) An asset has a current market price of 200P , and will pay an income of 10P in exactly three months’ time. Calculate the price of a forward contract to be settled in exactly six months, assuming a risk-free rate of interest of 8% per annum convertible quarterly.
{F} A company A lended some day 19006 € to the company B. The interest rate was agreed to be 10 % annually. Later on, the company B paid back to the company A 19483 €. How long was the loan period in calendar days?
The consumer price index (CPI) rose from 105.9 to 113.4, while Helen's net salary decreased 7.0 %. Calculate the relative real change in Helen's salary (purchasing power) as percentage.
The consumer price index (CPI) rose from 106.7 to 124.9, while Helen's net salary didn't change at all. Calculate the relative real change in Helen's salary (purchasing power) as percentage.
The net revenue of a company rose 3.6 %, while inflation rate was 3.0 %. Calculate the relative real change in revenue as percentage.
Tshego won R165000 and decided to deposit 65% of this amount in an account earning 8,25% interest per year, compounded every four months. What is the accumulated amount after five years?
<e> Gerry needs a loan of 8000 € for his holiday trip. The loan period is 1 year and the payments are made quarterly. The loan has fixed principal payment and the interest rate is 3.8 % p.a. How much money Gerry needs for the third payment?
<e> A vending treasury is purchased for RM 2,800 in cash with RM 700 down payment and fourteen monthly payments. If the interest calculated is 10% per annum, using the fixed rate equation calculation find:
1. Total interest charged
2.Secondly. monthly payment
Sea Salt Restaurant borrows R100000 for five years from a Bank to upgrade its premises. The bank charges interest at 12% per annum compounded monthly over five years. What is the equal monthly payment of Sea Salt Restaurant to the bank?
A stone crushing company is planning to purchase a Wheel Loader to be used for conveying raw stone to a large Stone Crushing Machine and loading crushed stone in trucks. A new Wheel loader can be purchased directly from Caterpillar Company for $150,000. The new Wheel Loader will reduce the annual cost by $25,500 and increase annual operating expenses by $4,500. The useful life of the Wheel Loader is 20 years. After 20 years it will have a salvage value of $30,000. The company uses straight line method of depreciation for allassets
Present a case in support of the use of accounting rate of return as an investment appraisal technique
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