BUSI 2504 Study Guide - Net Present Value, Series Expansion, Amortization Schedule

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Document Summary

Lo1 how to determine the future and present value of investments with multiple cash flows. Lo2 how loan payments are calculated and how to find the interest rate on a loan. Lo3 how loans are amortized or paid off. Lo4 how interest rates are quoted (and misquoted). Answers to concepts review and critical thinking questions. 4. (lo1) assuming positive cash flows, both the present and the future values will rise. (lo1) it"s deceptive, but very common. The basic concept of time value of money is that a dollar today is not worth the same as a dollar tomorrow. The deception is particularly irritating given that such lotteries are usually government sponsored! 6. (lo1) the better deal is the one with equal installments. Note: all end of chapter problems were solved using a spreadsheet. Due to space and readability constraints, when these intermediate steps are included in this solutions manual, rounding may appear to have occurred.