Lab Question 1: A contract requires lease payments of $800 at the beginning of every
Question:
Lab
Question 1:
A contract requires lease payments of $800 at the beginning of every month for 8 years.
a. What is the present value of the contract if the lease rate is 4.25% compounded annually?
Round to the nearest cent
b. What is the present value of the contract if the lease rate is 4.25% compounded monthly?
Round to the nearest cent
Question 2:
Bryan invested $1,600 at the beginning of every 6 months in an RRSP for 11 years. For the first 6 years it earned interest at a rate of 3.60% compounded semi-annually and for the next 5 years it earned interest at a rate of 6.80% compounded semi-annually.
a. Calculate the accumulated value of her investment at the end of the first 6 years.
$48,861.71
$49,496.96
$21,219.60
$21,601.56
b. Calculate the accumulated value of her investment at the end of 11 years.
$48,861.71
$49,496.96
$40,920.52
$21,601.56
c. Calculate the amount of interest earned from the investment.
$14,296.96
$13,661.71
$10,978.00
$3,318.96
Question 3:
a. What would be the accumulated value of the RESP at the end of 11 years?
Round to the nearest cent
b. What would be the accumulated value of the RESP at the end of 20 years?
Round to the nearest cent
c. What is the amount of interest earned during the 20 year period?
Round to the nearest cent
Question 4:
For 20 years, Janet saved $900 at the beginning of every month in a fund that earned 3.5% compounded annually.
a. What was the balance in the fund at the end of the period?
Round to the nearest cent
b. What was the amount of interest earned over the period?
Round to the nearest cent
Question 5
A contract requires lease payments of $800 at the beginning of every month for 8 years.
a. What is the present value of the contract if the lease rate is 4.25% compounded annually?
Round to the nearest cent
b. What is the present value of the contract if the lease rate is 4.25% compounded monthly?
Round to the nearest cent
Question 6:
Hannah secured a 5-year car loan at 6.20% compounded annually that required her to make payments of $887.79 at the beginning of each month. Calculate the cost of the car if she made a downpayment of $1,250.
Round to the nearest cent
Financial Management Theory and Practice
ISBN: 978-1305632295
15th edition
Authors: Eugene F. Brigham, Michael C. Ehrhardt