1) Mike deer company:
Future value : $ 616,000
Table factor: PV factor for 6%, 5 years is 0.7473
Present value : $ 616,000* 0.7473 = $ 460,336.8
2)
Future value : $ 20,000
Table factor: PV factor for 3%, 6 years is 0.8375
Amount borrowed : $ 20,000* 0.8375 = $ 16,750
3) Tom Thompson
Future value : $ 30,940
present value : $11,000
Table factor = Future value/present value = 30,940/11,000 = 2.8127
years : At 12 years, 9% future value table factor is 2.8127
4) Bill padley
Future value : $ 29,400
present value : $ 24,000
Table factor = Future value/present value = 29,400/24,000 = 1.2250
Interest rate : At 3 years, 7% future value table factor is 1.2250
5)Mark welsch
present value : $7,900
Table factor: annual rate of 4% compounded quarterly for four years have table factor equal to 1% (4%/ no. of quarters) future value rate of 16 years (4 years * no. of quarters in a year) i.e., 1.1726
Total accumulation: $7,900*1.1726 = $ 9,263.54
6) Spiller Corp.
Table values are based on
n = 10 years * 2 ( semi annual) = 20
i = 10%/2 = 5%
Cash flow | table value | amount | present value |
---|---|---|---|
Present(maturity) value | 0.3769 | $400,000 | $150,760 |
Interest(annuity) | 12.462 | $24,000 | $299,088 |
Total cash proceeds | $ 449,848 |
Explanation:
Semi annual interest payment: $400,000*12%*(1/2) = $24,000
Principal repayment: present value table factor at 5%, 20th year is 0.3769
Interest payments: present value annuity factor at 5%, 20 years is 12.462
THNAK YOU
Mike Derr Company expects to earn 6% per year on an investment that will pay $616,000...
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