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ACTG103 - Financial Theory and Techniques 2017 S1
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Assignment Booklet Part 2 and 3 - Company 2 Alpha
Question 1: Calculating future value in a compound interest formula.
Samuel invested $30,000 at 9% effective annual interest rate for 6 years. Calculate the future value of his investment.
Question 2: Calculating present value in a compound interest formula.
David would like to have a savings of $14,000 in an account at the end of five years. Calculate the amount he needs to save now if the savings account earns an annually effective rate of return of 4%.
Question 3: Calculating effective interest rate in a compound interest formula.
Jennifer borrowed $16,000 from her best friend, four years later, Jennifer repaid her $20,000. Calculate the effective annual interest rate.
Question 4: Calculating number of periods in a compound interest formula.
Edward invested $12,000 in a fund offering a rate of return of 4% per year, approximately how many years will it take for the investment to reach $15,000?
Question 5: Calculating yield to maturity in bond valuation.
John bought a bond on 1 July 2010 for $45,644.74 with a face value of $50,000 on 1 July 2016. The coupon rate is 8% per annum. Estimate the yield to maturity