(b) What is the accumulated amount if RM 1,400 is invested for 5 years in account...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
(b) What is the accumulated amount if RM 1,400 is invested for 5 years in account that pays, (1) 9% annual simple interest? (ii) 9% interest compounded quarterly? (c) An investment company pays 7% compounded quarterly. What is the effective rate? (3 marks) The Formula Table is Given Below MATHEMATICAL FORMULA Linear Equations (1) (ii) (iii) (iv) (3 marks) (4 marks) y₂-y₁ Slope of a line, m = X₂-X₁ Point-slope form, y - y₁ = m(x-x₁) Slope-intercept form, y=mx+b (where m = slope, b = = y-intercept) General form, Ax+By+C =0 Mathematics for Finance a) Simple Interest Interest, /= Prt (i) Accumulated amount, A = P (1 + rt) Where P = principal, r = interest rate, t = number of years b) Compound Interest (1) (ii) Accumulated amount, A = P(1 + i)" Present value for compound interest, P = 4(1+i)" Where i=, n = mt, and m = number of conversion periods per year m c) Effective Rate of Interest d) Annuities Notations: i and n = mt m (1) Future value of an annuity 1+i)" R[ (1 + )" − 1] S = R = [₁ + #] m Where S = future value of ordinary annuity of n payments of R dollars periodic payment e) Sinking Fund and Amortization Notations: i= and n = mt m (1) Sinking Fund formula Si (1 + i)" - 1 Where R= periodic payment required to accumulate S dollars over n periods R= שר Present value of an annuity - (1 + i)" i P=R Where P = present value of ordinary annuity of n payments of R dollars periodic payment (ii) Amortization formula Pi R 1-(1 + i)™" Where R = periodic payment on a loan of P dollars to be amortized over n periods (b) What is the accumulated amount if RM 1,400 is invested for 5 years in account that pays, (1) 9% annual simple interest? (ii) 9% interest compounded quarterly? (c) An investment company pays 7% compounded quarterly. What is the effective rate? (3 marks) The Formula Table is Given Below MATHEMATICAL FORMULA Linear Equations (1) (ii) (iii) (iv) (3 marks) (4 marks) y₂-y₁ Slope of a line, m = X₂-X₁ Point-slope form, y - y₁ = m(x-x₁) Slope-intercept form, y=mx+b (where m = slope, b = = y-intercept) General form, Ax+By+C =0 Mathematics for Finance a) Simple Interest Interest, /= Prt (i) Accumulated amount, A = P (1 + rt) Where P = principal, r = interest rate, t = number of years b) Compound Interest (1) (ii) Accumulated amount, A = P(1 + i)" Present value for compound interest, P = 4(1+i)" Where i=, n = mt, and m = number of conversion periods per year m c) Effective Rate of Interest d) Annuities Notations: i and n = mt m (1) Future value of an annuity 1+i)" R[ (1 + )" − 1] S = R = [₁ + #] m Where S = future value of ordinary annuity of n payments of R dollars periodic payment e) Sinking Fund and Amortization Notations: i= and n = mt m (1) Sinking Fund formula Si (1 + i)" - 1 Where R= periodic payment required to accumulate S dollars over n periods R= שר Present value of an annuity - (1 + i)" i P=R Where P = present value of ordinary annuity of n payments of R dollars periodic payment (ii) Amortization formula Pi R 1-(1 + i)™" Where R = periodic payment on a loan of P dollars to be amortized over n periods
Expert Answer:
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
Posted Date:
Students also viewed these accounting questions
-
What is the accumulated sum of each of the following streams of payments? a. $ 500 a year for 10 years compounded annually at 5 percent b. $ 100 a year for 5 years compounded annually at 10 percent...
-
What is the accumulated value after 12 years of monthly deposits of $145 earning interest at 5% compounded semi-annually if the deposits are made at the end of each month?
-
Calculate the future value of $5000 invested for 5 years at a 12% annual rate of interest with annual compounding.
-
Top managers of Ryan Products, Inc., have asked you to compare the companys profit performance and financial position with the average for the industry. The companys accountant has given you the...
-
On January 1, 2014, Alphabet Company leased an office building to Numbers, Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 16 years. 2. The leased...
-
In Exercises 37 through 42, solve the given initial value problem for y = f(x). where y = 3 when x = 1 dy dx x+2 + 4x + 5
-
Casey Ltds accounting system uses special journals and subsidiary ledgers. The following transactions occurred during March 2025 (GST is ignored). All sales are n/30. Required (a) Ignoring GST, enter...
-
Irina Company was organized on January 1. During the first year of operations, the following plant asset expenditures and receipts were recorded in random order. Debits 1. Cost of real estate...
-
1. Consider two satellites S and S with periods of revolution 1hr. and 8 hr. respectively revolving around a planet in circular orbits. The ratio of angular velocity of satellite S to the angular...
-
Tax Software Assignment - Fall 2023 Ms. Jeanette Letourneau (SIN 123-456-789) was born in Montreal on December 15, 1979. She has spent most of her working life a song writer but also has a part-time...
-
In total, 1,097 replacements were made. Use this fact to repeat #8, but this time estimate from the data using maximum likelihood estimation. Remember to adjust the degrees of freedom to account for...
-
If you set aside $5,000 per year (i.e., one deposit of $5,000 each year) in a Roth IRA for the next 25 years (the first contribution is to be made exactly one year from now, so use an ordinary...
-
In 1949, the city of Sherbrooke, Quebec, built a hospital for about $500,000. In 1987, the city restored its courthouse for about $2.4 million. A price index for nonresidential construction was 14 in...
-
Define Business Cycle and its Influences.
-
Suppose you need to buy 6 tons of Italian olives in 6 months for a fixed price contract (your sales quote is in USD). 6 tons of Italian olives currently costs 80,000euro. The current exchange rate is...
-
Solve the linear system: x2+4x3=-4 x1 +3x2+3x3 = -2 3x1 + 7x2 + 5x3 = 6 by row reducing the augmented matrix.
-
A supermarket chain is interested in exploring the relationship between the sales of its store-brand canned vegetables (y), the amount spent on promotion of the vegetables in local newspapers (x1)...
-
Stanford Simmons, who recently sold his Porsche, placed $ 10,000 in a savings account paying annual compound interest of 6 percent. a. Calculate the amount of money that will have accrued if he...
-
Tri- State Enterprises plans to issue commercial paper for the first time in the firms 35- year history. The firm plans to issue $500,000 in 180- day maturity notes. The paper will carry a 10 1/ 2...
-
What are the differences between GAAP and IFRS?
-
Eugene Fama and Robert Shiller recently won the Nobel Prize in economics. Go to http://nobelprize.org/nobel_prizes/economics/ and locate the press release on Eugene Fama and Robert Shiller. What was...
-
Visit the Bloomberg Markets website at www.bloomberg.com/markets/stocks. Their interactive graph allows you to see cumulative returns for individual stocks as well as market indices. Over the last...
-
Compute the price of a share of stock that pays a \($5\) per year dividend and that you expect to be able to sell in one year for \($40\), assuming you require a 5% return.
Study smarter with the SolutionInn App