Homework 1 F3512
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Community College of Philadelphia *
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3512
Subject
Finance
Date
May 3, 2024
Type
xlsx
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28
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Retirement Problem
0 PMT need - pmt of pv. Interest
7%
$70,235.82 Annual Deposit
1601.17
$1,713
Annual Withdrawl
$10,000
Age
Beginning of Year
End of Year
Account Balance (Beginning)
40
1
0
0.00
41
2
1
1,713.26
42
3
2
3,546.44
43
4
3
5,507.95
44
5
4
7,606.76
45
6
5
9,852.49
46
7
6
12,255.43
47
8
7
14,826.56
48
9
8
17,577.68
49
10
9
20,521.37
50
11
10
23,671.13
51
12
11
27,041.36
52
13
12
30,647.51
53
14
13
34,506.10
54
15
14
38,634.78
55
16
15
43,052.47
56
17
16
47,779.40
57
18
17
52,837.22
58
19
18
58,249.08
59
20
19
64,039.77
60
21
20
70,235.82
61
22
21
65,152.32
62
23
22
59,712.99
63
24
23
53,892.89
64
25
24
47,665.40
65
26
25
41,001.97
66
27
26
33,872.11
67
28
27
26,243.16
68
29
28
18,080.18
69
30
29
9,345.79
Instead of using Solver, use PV and PMT to solve for annual deposit:
annual withdraw
10000
Interest rate
7%
The key is that the future value of first 20 years' deposits (annuity due) at the end of year 20 is t
First solve for present value of all the withdrawals using PV function
PV
70235.82
Then use PMT to solve for the annual deposit
PMT
1601.17
119.927992085769
1,833.19
Deposit (Beginning)
Interest Earned for the year
Withdraw (End)
Account Total (End)
1,601.17
112.08
0.00
1,713.26
1,601.17
232.01
0.00
3,546.44
1,601.17
360.33
0.00
5,507.95
1,601.17
497.64
0.00
7,606.76
1,601.17
644.56
0.00
9,852.49
1,601.17
801.76
0.00
12,255.43
1,601.17
969.96
0.00
14,826.56
1,601.17
1,149.94
0.00
17,577.68
1,601.17
1,342.52
0.00
20,521.37
1,601.17
1,548.58
0.00
23,671.13
1,601.17
1,769.06
0.00
27,041.36
1,601.17
2,004.98
0.00
30,647.51
1,601.17
2,257.41
0.00
34,506.10
1,601.17
2,527.51
0.00
38,634.78
1,601.17
2,816.52
0.00
43,052.47
1,601.17
3,125.76
0.00
47,779.40
1,601.17
3,456.64
0.00
52,837.22
1,601.17
3,810.69
0.00
58,249.08
1,601.17
4,189.52
0.00
64,039.77
1,601.17
4,594.87
0.00
70,235.82
0.00
4,916.51
10,000.00
65,152.32
0.00
4,560.66
10,000.00
59,712.99
0.00
4,179.91
10,000.00
53,892.89
0.00
3,772.50
10,000.00
47,665.40
0.00
3,336.58
10,000.00
41,001.97
0.00
2,870.14
10,000.00
33,872.11
0.00
2,371.05
10,000.00
26,243.16
0.00
1,837.02
10,000.00
18,080.18
0.00
1,265.61
10,000.00
9,345.79
0.00
654.21
10,000.00
0.00
the same as the present value of the 10 years' withdraw (ordinary annuity) at the end of year 20
Quesito
easier, y
some m
year. Aft
the end
each ye
Require
solve fo
Seek wi
on 1
. You are currently 40 years old and intend to retire at age 60. To make your retirement you intend to start a retirement account. At the beginning of each of years, you will deposit money to your retirement account till your retire. You expect the account will earn 7% per fter retirement at age 60, you want to withdraw $10,000 from your retirement account at d
of each year for 10 years. How much money should you plan to deposit in your retirement ear? ement: Use all the three methods (1) Solver, (2) Goal Seek, and (3) PV and PMT function to or annual deposit. Use snipping tool to screenshot the dialog windows of Solver and Goal ith the appropriate parameters.
99415
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Related Questions
Present value of an ordinary annuity. Fill in the missing present values in the following table for an ordinary annuity:
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Questic
Present Value of Annuity
Not ye
Annuity
Years
Interest Rate Compounding
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Marke
$100.00
37
20.00%
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P Flac
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O c. $26,083.82
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X N
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Payment
$
123
4,555
74,484
167,332
Years
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5
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Interest Rate
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8
10
1
Future Value (Payment
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Copyright © 2020 Pearson Education Inc. All rights reserved. |
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6
7
8
9
10
1
1
2
3
2
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6
3
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12%
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Net Cash
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Expansion
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Net Cash
Flows
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computer servers. The projects have different useful lives, but each requires an investment of $490,000. The
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Year
1
1
2
3
4
2
Year
5
6
3
7
8
9
10
4
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5
6
0.943
0.890
0.840
Present Value of $1 at Compound Interest
6%
10%
0.792
0.747
0.705
0.665
0.627
Net Cash
Flows
Office
Expansion
$125,000
125,000
125,000
125,000
125,000
125,000
0.592
0.558
0.909
0.826
0.751
0.683
0.621
0.564
0.513
Net Cash
Flows
Servers
0.467
$165,000
165,000
165,000
165,000
0.424
0.386
12%
0.893
0.797
0.712
0.636
0.567
0.507
0.452
0.404
0.361
0.322
15%
0.870
0.756
0.658
0.572
0.497
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NE-Alpha
* My Courses
Question 80
Annuity
Years
Interest Rate Compounding Present Value of Annuity
Not yet answ
Marked out c
18
1.89%
Monthly
$1,083,460.00
P Flag quest
a. $5,463.17
O b. $5,940.97
O c. $5,921.44
O d. $5,964.33
Finish atter
Previous page
N
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$
Saving Money - 22/SU INTENSIVE QUANT REASONING (105A-900)
Assume you put $600 per month into a retirement account for 14 years, and the account has an APR of 3.02% compounded monthly.
$
$
What is the account balance at the end of the 14 years? Round your answer to the nearest cent.
How much of the money in the account at the end of the 14 years is your personal investment, meaning that the money came directly from you?
webassign.net
How much of the money in the account at the end of the 14 years is interest?
What percentage of the account balance after 14 years is interest?
Round your percentage to one decimal place.
%
"p
WWA Finance 1 -Saving Money and Earning Interest - 22/SU INTENSIVE QUANT REASONING(1054-900), Sum....
. .- Thu Ju
Hint: The percentage of interest in the account is equal to the amount of the account balance that is interest divided by the base account balance. Multiply that result by 100…
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Number of
Total of monthly
payments
$5,849.76
Total finance
monthly
payments
Amount
Purchase price
of a used car
$5,793
Down
charge
$1,339.76
financed
APR
payment
$1, 283
48
$4,510
13%
Monthly Payment
es
By table
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Question 6
On Octobel 31, 2020, Tarling Company neguiated a one year 100.000-eanc loan kon a f n bank at an intert rate of 3% per yea tont paymen e mae s on Odb 31, nd
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Date
ranc Rate
October 31, 2020
30 49
December 31, 2020
S0 55
October 31, 2021
50 65
Required:
Assuming the above information Prepare all jounal entries related to thi foreign orency bonowing
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loan; the monthly payments on the new loan; and the total amount saved on interest by
refinancing.
Click the icon to view a table of monthly payments on a $1,000 loan.
The monthly payments on the original loan are $
(Type an integer or a decimal.)
Enter your answer in the answer box and then click Check Answer.
2 parts
remaining
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Expenses other than depreciation
Depreciation (straight-line basis)
Increase in net income from contract work
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55,500
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b.
C.
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Present value of an Annuity of $1 in Arrears
Periods
4%
6%
8%
10%
12%
14%
1
0.962
0.943
0.926
0.909
0.893
0.877
2
1.886
1.833
1.783
1.736
1.690
1.647
3
2.775
2.673
2.577
2.487
2.402
2.322
4
3.630
3.465
3.312
3.170
3.037
2.914
5
4.452
4.212
3.993
3.791
3.605
3.433
6
5.242
4.917
4.623
4.355
4.111
3.889
7
6.002
5.582
5.206
4.868
4.564
4.288
8
6.733
6.210
5.747
5.335
4.968
4.639
9
7.435
6.802
6.247
5.759
5.328
4.946
10
8.111
7.360
6.710
6.145
5.650
5.216
Lucas Company is considering a project with an initial investment of $530,250 in new equipment that will yield annual net cash flows of $95,000, and will be depreciated at $75,750 per year over its seven year life. What is the internal rate of return?
a.6%
b.14%
c.10%
d.12%
e.8%
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Grove Media plans to acquire production equipment for $845,000 that will be depreciated for tax purposes as follows: year 1,
$329,000; year 2, $189,000; and in each of years 3 through 5, $109,000 per year. A 10 percent discount rate is appropriate for this
asset, and the company's tax rate is 20 percent. Use Exhibit A.8 and Exhibit A.9.
Required:
a. Compute the present value of the tax shield resulting from depreciation.
b. Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($169,000 per year).
Complete this question by entering your answers in the tabs below.
Required A Required B
Compute the present value of the tax shield resulting from depreciation.
Note: Round PV factor to 3 decimal places.
Present value of the tax shield
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Amount financed 18200 number of payments 72 monthly payment 425.08 finace charge 12405.76 whats the apr%
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plan A
plan B
plan C
Down payment
1,789.91
2,309.65
3,764.51
Annual payments
5,097.70
7,450.16
9,845.78
Years
20
20
20
Discount rate
12%
12%
12%
What is the present value of plan B?
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Amortization schedule
Loan amount to be repaid (PV)
$25,000.00
Interest rate (r)
11.00%
Length of loan (in years)
3
a. Setting up amortization table
Formula
Calculation of loan payment
#N/A
Year
Beginning Balance
Payment
Interest
Repayment of Principal
Remaining Balance
1
2
3
b. Calculating % of Payment Representing Interest and Principal for Each Year
Year
Payment % Representing Interest
Payment % Representing Principal
Check: Total = 100%
1
2
3
Formulas
Year
Beginning Balance
Payment
Interest
Repayment of Principal
Remaining Balance
1
#N/A
#N/A
#N/A
#N/A
#N/A
2
#N/A
#N/A
#N/A
#N/A
#N/A
3
#N/A
#N/A
#N/A
#N/A
#N/A
b. Calculating % of Payment Representing Interest and Principal for Each Year
Year
Payment %…
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PART 2 Financial Tools
P5-19 Future value of an annuity For each case in the accompanying table, answer the
questions that follow.
Case
B
E
meny
Amount of annuity
$ 2,500
30.000
11,500
6,000
Interest rate
*%*
23^2
12
14
Deposit period (years
a. Calculate the future value of the annuity assuming that it is
(1) An ordinary annuity,
(2) An annuity due.
b. Compare your findings in parts all) and a(2). All else being identical, which type
of annuity-- ordinary or annuity due—is preferable? Explain why,
arrow_forward
Appendix C Future value of an annuity of $1, FVA
Period
1
2
3
5
THREE
15
17
19
20
25
30
40
50
1.000
2.010
3.030
4.060
5.101
6.152
7.214
8.286
9.369
10.462
11.567
12.683
13.809
14.947
16.097
17.258
18.430
19.615
20.811
22.019
28.243
34.785
48.886
64.463
1.000
2.020
3.060
4.122
5.204
6.308
7.434
8.583
9.755
10.950
12.169
13.412
14.680
15.974
17.293
1.000
2.030
3.091
4.184
5.309
6.468
7.662
8.892
10.159
11.464
12.808
14.192
15.618
17.086
18.599
20.157
21.762
23.414
18.639
20.012
21.412
22.841
24.297
32.030
40.588
60.402
84.579 112.80
FVA-A
25.117
26.870
36.459
47.575
75.401
(1+0)"
1.000
2.040
3.122
4.246
5.416
6.633
7.898
10.583
12.006
13.486
15.026
16.627
18.292
20.024
23.698
25.645
27.671
29.778
41.646
56.085
95.026
152.67
1.000
2.050
3.153
4.310
5.526
6.802
8.142
9.549
12.578
14.207
15.917
17.713
19.599
21.579
23.657
25.840
28.132
30.539
33.066
47.727
66.439
120.80
209.35
Percent
1.000
2.060
3.184
4.375
5.637
6.975
8.394
9.897
11.491
13.181
14.972
16.870
18.882
21.015
23.276
25.673…
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- Present value of an ordinary annuity. Fill in the missing present values in the following table for an ordinary annuity:arrow_forwardQuestic Present Value of Annuity Not ye Annuity Years Interest Rate Compounding Due Marke $100.00 37 20.00% Weekly P Flac O a. $42,071,286.08 O b. $41,910,093.41 O c. $26,083.82 O d. $25,983.88 X N hparrow_forwardPayment $ 123 4,555 74,484 167,332 Years 13 8 5 9 Interest Rate (Annual) 13 % 8 10 1 Future Value (Payment made on last day of period) Future Value (Payment made on first day of period)arrow_forward
- Crab Company is considering a project with an initial investment of $600,000 that is expected to produce cash inflows of $129,500 for ten years. Crab's required rate of return is 16%. (Click on the icon to view Present Value of $1 table.) E (Click on the icon to view Present Value of Ordinary Annuity of $1 table.) 14. What is the NPV of the project? 15. What is the IRR of the project? 16. Is this an acceptable project for Crab? 14. What is the NPV of the project? (Enter the factor amount to three decimal places, X.XXX. Round the present value of the annuity to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.) Net Cash Annuity PV Factor Present (i-16%, n=10) Value Years Inflow 1- 10 Present value of annuity Investment Net present valuearrow_forwardUnearned Interest by the Actuarial Method Each loan was paid in full before its due date. (a) Obtain the value of h from the appropriate formula. Then (b) use the actu- arial method to find the amount of unearned interest, and (c) find the payoff amount. 33. 34. Regular Monthly Payment $212 $575 APR 4.7% 5.9% Remaining Number of Scheduled Payments after Payoff 4 8arrow_forwardQuestion Content Area Assuming a 360-day year, when a $15,586, 90-day, 7% interest-bearing note payable matures, total payment will be a.$1,091 b.$16,677 c.$15,859 d.$273arrow_forward
- Franklin's new snowmobile cost $9,500. After his down payment of $1,500, he financed the remainder at 10% for 3 years. Use the table to find the monthly payment for the amortized loan. Find the total interest paid on the loan. Click the icon to view a table of monthly payments on a $1,000 loan. The monthly payments for this loan are $. (Round to the nearest cent as needed.) Enter your answer in the answer box and then click Check Answer. ? 1 part remaining Clear All Greck Answer javascript:doExercise(5); Copyright © 2020 Pearson Education Inc. All rights reserved. | 99 a 近arrow_forwardCalculate the monthly payment by table lookup and formula. (Answers will not be exact due to rounding of percents in table lookup.). (Use 13% for table lookup.). (Use the loan amortization table) Note: Round your answers to the nearest cent. Purchase price of a used car $5,633 By table By formula Down payment $1,203 Monthly Payment Number of monthly payments 48 Amount financed $4,430 Total of monthly payments $5,689.76 Total finance charge $1,259.76 APR 13%arrow_forwardIncreasing the down payment on a mortgage reduces both the size of the monthly payments and the total interest paid. Calculate (a) the reduction in the monthly payment by increasing the down payment by the amount specified, and (b) the amount saved on interest over the life of the loan. Assume the mortgage in for 10 years and use the amortization table to find the monthly payments Increase in Amount of Loan Interest Rate Down payment $150,000 5% $9,000 Click the icon to view a table of monthly payments on a $1,000 loan. Down Payment $27,000 a. The monthly payment will be reduced by $ when the down payment is increased by $9,000 (Round to the nearest cent as needed.) b. Increasing the down payment by $9.000 saved on interest over the life of the loan (Round to the nearest cent as needed)arrow_forward
- Annuity Years Interest Rate Compounding Future Value of Annuity 3 12.00% Weekly $85,000.00 a. $453.29 b. $468.69 O c. $484.42 O d. $451.51 hparrow_forwardThe investment committee of Sentry Insurance Co. is evaluating two projects, office expansion and upgrade to computer servers. The projects have different useful lives, but each requires an investment of $490,000. The estimated net cash flows from each project are as follows: Year 1 2 Year 3 4 5 The committee has selected a rate of 12% for purposes of net present value analysis. It also estimates that the residual value at the end of each project's useful life is $0, but at the end of the fourth year, the office expansion's residual value would be $180,000. 6 7 8 9 10 1 1 2 3 2 4 5 6 3 0.943 0.890 0.840 Present Value of $1 at Compound Interest 6% 10% 12% 0.792 0.747 0.705 0.665 0.627 0.592 0.558 Net Cash Flows Office Expansion $125,000 125,000 125,000 125,000 125,000 125,000 0.943 1.833 2.673 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 Net Cash Flows Servers $165,000 165,000 165,000 165,000 0.909 1.736 2.487 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322…arrow_forwardThe investment committee of Sentry Insurance Co. is evaluating two projects, office expansion and upgrade to computer servers. The projects have different useful lives, but each requires an investment of $490,000. The estimated net cash flows from each project are as follows: Year 1 1 2 3 4 2 Year 5 6 3 7 8 9 10 4 The committee has selected a rate of 12% for purposes of net present value analysis. It also estimates that the residual value at the end of each project's useful life is $0, but at the end of the fourth year, the office expansion's residual value would be $180,000. 5 6 0.943 0.890 0.840 Present Value of $1 at Compound Interest 6% 10% 0.792 0.747 0.705 0.665 0.627 Net Cash Flows Office Expansion $125,000 125,000 125,000 125,000 125,000 125,000 0.592 0.558 0.909 0.826 0.751 0.683 0.621 0.564 0.513 Net Cash Flows Servers 0.467 $165,000 165,000 165,000 165,000 0.424 0.386 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 15% 0.870 0.756 0.658 0.572 0.497 0.432…arrow_forward
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