Q1 - Describe N,I/Y,PV,PMT, and FV. Q2 Why is there one negative sign among the last
Question:
Q1 - Describe N,I/Y,PV,PMT, and FV.
Q2 – Why is there one negative sign among the last three listed in Q1?
Q3 – What is the difference between compounding and discounting?
Q4 – What is an annuity? What are the different types of annuities? When are payments made?
Q5 – What is a perpetuity? What is the relationship between PV and Interest?
Q6 – Does FV get larger or smaller based off monthly compounding compared to quarterly compounding?
Q7 – Will the effective annual rate ever be equal to the nominal (quoted) rate?
Q8 – What is the future value of an initial $18,300 after 16 years if it is invested in an account paying 7.25% interest?
Q9 – What is the present value of $6666 to be received in 12 years if the interest rate is 13.55%?
Q10a – Sometimes we need to find out long it will take money to grow to some particular amount. For example, if a company’s sales are growing at 12% per year, how long will it take sales to triple?
Q10b – If you want the investment to quadruple in 12 years, what interest rate must it earn?
Q11a – What is the future value of a 6-year ordinary annuity of $1350 if the interest rate is 10.5%?
Q11b – What is the present value of the annuity? Hint: Solve for PV.
Q11c – What is the future value and present value if the annuity were an annuity due? Solve.
Q12 – What is the present value of the following uneven cash flow: 1145,1345,1745,-450? The interest rate is 3%.
Q13 – Define the stated or quoted, or nominal rate and the periodic rate.
Q14 – What is the future value of 680 after 10 years under 24% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding?
Q15 – What is the effective annual rate? What is the EFF% or EAR for a nominal rate of 5% compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?
Managerial Accounting Decision Making and Performance Management
ISBN: 978-0273764489
4th edition
Authors: Ray Proctor