Financial Math Answers

Determine the present value of INR 2500 invested today assuming a rate of return of 10%. Define the concept of Present value. Compute- the Present value received one year from now, received at the end of 5 years, received at the end of 10 years. Discuss with reason, which of the three value, is the lowest one

On his 40th birthday ofentse decides he will buy a bike trailer for his 50th birthday. he estimates that it will cost him 48 000 when he turns 50.he starts saving immediately each month paying an amount into an account earning 8.58% interest per year ,compounded monthly the monthly amount payment is

1.592,95

2.597,19

3. 252,18

4. 253,99

Fatu took out an endowment policy. the first annual payment was RX whereafter it increased yearly by 1700.after 20 years the policy paid out 1 005 962.the applicable yearly interest rate is 10% the value of x is approximately

1. 11 816

2. 17 564

3. 6 500

4. 564

Lesedi buys a house and make a down payment of 16% of the price of the house. for the remaining amount,she manages to secure a loan at an interest rate of 12.05% per year,compounded monthly for a period of 20 years her monthly her payment is 18556.84

A..The size of the loan ( to the nearest Rand is)

1. 4 453 642

2. 1 680 000

3. 2 167317

4. 1 338320

B.. The down payment is

1. 213 411

2. 320 00

3. 346 771

4. 268 800

The directors of Thor Limited have appointed you as their financial consultant. They are considering new investment projects and need you to calculate the cost of capital for the company. The present capital structure is as follows; 2 000 000 ordinary shares with a par value of R1.00 per share. These shares are currently trading at R2.50 per share and the latest dividend paid is 40 cents. An average dividend growth of 9% is maintained. 1 500 000 8% R2.00 preference shares, with a market value of R1.80 per share. R10 000 000 non-distributable reserves R2 000 000 7% debentures due in 6 years time and the current yield to maturity is 10%, and R1 000 000 15% bank loan. Additional information: The company has a beta of 2.1 a risk free rate of 7% and a return of market of 16%. The company tax rate is 30%. Required 3.1 Calculate the weighted average cost of capital using Gordon growth model to calculate the cost of equity. (7) 3.2

Aaron’s cell-phone plan includes 3GB of data. On the 21st day of his billing period, Aaron received a message from his service provider that he has already used 75% of his data allowance for the 31-day billing period. At this rate, will he use more than 3GB of data for the month?

The recent global development of Russia invading Ukraine has led to USA and European countries imposing sanctions on Russia. Given that Russia is a major player in OPEC, discuss the implication of this in South African economy

 Assume the total cost of a tertiary education will be R75 000 when your child enters university in 18 years. You presently have R7 000 to invest. What rate of interest must you earn on your investment to cover the cost of your child’s tertiary education?

An interest rate of 14.90% per year compounded every three months is equivalent to a weekly compounded compounded interest rate of

BAT Industries is a manufacturer of orange juice in Jamaica. In 2022 it sold a bottle of orange juice to wholesalers for $100 and its variable costs is $40 and fixed costs is $100,000 monthly:

Using the information provided. 

i. How many bottles of orange juice must the company sell in order to break even and what is the breakeven revenue? (4 marks)

ii. If the company sold 1,500,000 bottles of orange juice for the year 2022, what was its profit? (4 marks)

iii. Due to inflation, in 2023 fixed costs are expected to rise to $175,000 monthly. What will be the NEW break-even quantity and revenue? (4 marks)

iv. If the company will sell the same number of orange juice as it did in 2022 and it wants to make the same profit as in 20222, what price should they sell each bottle of orange Juice for in 2023? (5 marks)