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  • Group Members:: Kazim Raza Rizvi Usman Ghani Javaid Ahmed Umair Maqbool

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    momindkhan
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    This document contains the names of four group members and their answers to four finance questions. It provides the formulas, calculations, and reasoning for each answer. The group's answers were: $3519 for Question 1, $3327 and $1061 for parts a and b of Question 2, $6427 for Question 3, and $434042 for Question 4. Formulas for present value, future value, annuities, and interest rates were used across the multiple questions.

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    Group Members:

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    This document contains the names of four group members and their answers to four finance questions. It provides the formulas, calculations, and reasoning for each answer. The group's answers were: $3519 for Question 1, $3327 and $1061 for parts a and b of Question 2, $6427 for Question 3, and $434042 for Question 4. Formulas for present value, future value, annuities, and interest rates were used across the multiple questions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    Download as docx, pdf, or txt
    27 views5 pages

    Group Members:: Kazim Raza Rizvi Usman Ghani Javaid Ahmed Umair Maqbool

    Uploaded by

    momindkhan
    This document contains the names of four group members and their answers to four finance questions. It provides the formulas, calculations, and reasoning for each answer. The group's answers were: $3519 for Question 1, $3327 and $1061 for parts a and b of Question 2, $6427 for Question 3, and $434042 for Question 4. Formulas for present value, future value, annuities, and interest rates were used across the multiple questions.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    of 5

    GROUP MEMBERS:

    KAZIM RAZA RIZVI

    USMAN GHANI

    JAVAID AHMED

    UMAIR MAQBOOL

    Question:#1
    The chosen option is

    Option b:
    Data: PVAn=?

    I=5%

    n=3yrs

    R=$1300

    Formula: PVAn=R(1/1+i)1+R(1/1+i)2+R(1/1+i)3

    PVAn=1300(1/1+0.05) 1+1300(1/1+0.05)2+1300(1/1+0.05) 3

    PVAn=1300(0.95)1+1300(0.95)2+1300(0.95)3

    PVAn=1300(0.95)+1300(0.90)+1300(0.857)

    PVAn=1235+1170+1114

    PVAn=$3519 Answer

    Question:#2
    Part:a
    Formula: FV = PV (1+i)n

    FV = 3510 (1+3%)3

    FV = 3510 (1.03)3

    FV = 3510 (1.09)

    FV = $3826

    Formula: PV = FV /(1+i)n

    PV =  3826_

            (1+5%)3  

    PV = 3826_

             (1.05)3

    PV = 3826_

             (1.15)  

    PV = $3327        Answer.

    Part:b
    Formula: FV = PV (1+i)n

    FV = 3510 (1+10%)3

    FV = 3510 (1+0.10)3

    FV = 3510 (1.10)3
    FV = 3510 (1.33)

    FV =$ 4668

    FVAn = R (FVIFAi,n)

    4668 = R (FVIFA10%,3)

    4668 = R (3.310)

    4668= R

    3.310

    R = 1410

    FVAn = R (FVIFAi,n) (1+i)n

    4668 = R (3.310) (1.10)3

    4668 = R (3.310) (1.33)

    4668 = R (4.40)

    4668_ = R

    4.40

    R = 1061           Answer.

    Question:#3
    Solution:
    Data: n=5

    i=9%

    Ending balance=$25,000

    Formula: PV=R(PVIFA in)


    25000=R(3.890)

    R=$6427

    no. of Payment Intrest Principal Ending

    year Balance

    0 - - - 25000

    1 6427 2250 4177 20823

    2 6427 1874 4553 16270

    3 6427 1464.3 4963 11307

    4 6427 1018 5409 5897

    5 6427 531 5897 -0-

    Question:#4
    Solution:
    Data: i=6%

    PV=?

    n=5yrs

    Formula: PV=FV/(1+i)n

    PV=150000/(1+0.06)1+125000/(1+0.06)2+100000/(1+0.06)3+75000/(1+0.06)4+

    50000/(1+0.06)5
    PV=150000/(1.06)1+125000/(1.06)2+100000/(1.06)3+75000/(1.06)4+

    50000/(1.06)5

    PV=150000/1.06+125000/1.12+100000/1.19+75000/1.26+50000/1.338

    PV=141509+111607+84033.6+59523.8+37369

    PV=$434042 Answer

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