Business Administration - Accounting & Financial Planning FIN401 Lecture Notes - Lecture 9: Armoured Fighting Vehicle

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greenmuskrat329

20 Jan 2018

School

Seneca College

Department

Business Administration - Accounting & Financial Planning

Course

Business Administration - Accounting & Financial Planning FIN401

Professor

Larry Hurst

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Document Summary

Annual interest rate m = number of compounding periods per year. Annuities and perpetuities: an annuity is a finite series of equal and periodic cash flows, a perpetuity is an infinite series of equal and periodic cash flows, an ordinary annuity offers payments at the end of each period. Annuities: an annuity due or annuity in advance offers payments at the beginning of each period. Future value of an annuity of (fvifa) Present value of an annuity of (pvifa) A = pva/pvifa (appendix d: table approach, calculator: Problem 2 a (assgn #10: carrie tune will receive ,000 a year for the next 20 years as payment for a song she has just written. If a present 10 percent discount rate is applied: should she be willing to sell out her future rights now for. Problem 2c leasing problem: you are looking to lease a chrysler 300.

Related Questions

An annuity due is:

a.	A series of equal beginning-of-period payments.
	b.	A payment due to be deposited today to cover a future retirement annuity.
	c.	A loan payment schedule with the interest paid periodically and the principal due at maturity.
	d.	A series of equal periodic payments made at the end of each period.
	e.	An account payable required to be paid today.

What is the relationship between discounting and compounding?

What is the relationship between the present-value factor and the annuity present-value factor?

What will $5,000 invested for 10 years at 8 percent compounded annually grow to? How many years will it take $400 to grow to $1,671 if it is invested at 10 percent compounded annually? At what rate would $1,000 have to be invested to grow to $4,046 in 10 years?

Calculate the future sum of $1,000, given that it will be held in the bank for 5 years and earn 10 percent compounded semiannually.

What is an annuity due? How does this differ from an ordinary annuity?

What is the present value of an ordinary annuity of $1,000 per year for 7 years discounted back to the present at 10 percent? What would be the present value if it were an annuity due?

What is the future value of an ordinary annuity of $1,000 per year for 7 years compounded at 10%? What would be the future value if it were an annuity due?

You have just borrowed $100,000, and you agree to pay it back over the next 25 years in 25 equal end-of-year payments plus 10 percent compound interest on the unpaid balance. What will be the size of these payments?

What is the present value of a $1,000 perpetuity discounted back to the present at 8 percent?

What is the present value of a $1,000 annuity for 10 years, with the first payment occurring at the end of year 10 (that is, ten $1,000 payments occurring at the end of year 10 through 19), given a discount rate of 10 percent?

Given a 10 percent discount rate, what is the present value of an perpetuity of $1,000 per year if the first payment does not begin until the end of year 10?