TUTORIA ADM
CATHOLIC UNIVERSITY OF SANTIAGO DE GUAYAQUIL
FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENCES
INTERNATIONAL BUSINESS MANAGEMENT
FINANCIAL MANAGEMENT I
TOPIC: DUTY CHAPTER 5 - EXERCISES
MEMBERS:
BRYAN CARRION
LILIBETH LIGER
KARLA SARANGO
TEACHER: Mr. PEDRO ZAMBRANO
SEMESTER A 2015
CHAPTER 5 – EXERCISES
P5–2 Future value calculation Without referring to the preprogrammed function on your financial calculator, use the basic formula for future value along with the given interest rate, r, and the number of periods, n, to calculate the future value of $1 in each of the cases shown in the following table.
P5–4 Future values for each of the cases shown in the following table, calculate the future value of the single cash flow deposited today at the end of the deposit period if the interest is compounded annually at the rate specified.
Personal Finance Problem
P5–6 Time value as part of your financial planning, you wish to purchase a new car exactly 5 years from today. The car you wish to purchase costs $14,000 today, and your research indicates that its price will increase by 2% to 4% per year over the next 5 years.
a. Estimate the price of the car at the end of 5 years if inflation is (1) 2% per year and (2) 4% per year.
b. How much more expensive will the car be if the rate of inflation is 4% rather than 2%?
The car will cost $1,576.01 more with a 4% inflation rate than an inflation rate of 2%. This increase is 10.196% (10.2%) more ($1,576.01/ $15,457.13) than would be paid with only a 2% rate of inflation.
c. Estimate the price of the car if inflation is 2% for the next 2 years and 4% for 3 years after that.
Personal Finance Problem P5–8 Time value Misty needs to have $15,000 at the end of 5 years to fulfill her goal of purchasing a small sailboat. She is willing to invest a lump sum today and leave the money untouched for 5 years until it grows to $15,000, but she wonders what sort of investment return she will need to earn to reach her goal. Use your
FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENCES
INTERNATIONAL BUSINESS MANAGEMENT
FINANCIAL MANAGEMENT I
TOPIC: DUTY CHAPTER 5 - EXERCISES
MEMBERS:
BRYAN CARRION
LILIBETH LIGER
KARLA SARANGO
TEACHER: Mr. PEDRO ZAMBRANO
SEMESTER A 2015
CHAPTER 5 – EXERCISES
P5–2 Future value calculation Without referring to the preprogrammed function on your financial calculator, use the basic formula for future value along with the given interest rate, r, and the number of periods, n, to calculate the future value of $1 in each of the cases shown in the following table.
P5–4 Future values for each of the cases shown in the following table, calculate the future value of the single cash flow deposited today at the end of the deposit period if the interest is compounded annually at the rate specified.
Personal Finance Problem
P5–6 Time value as part of your financial planning, you wish to purchase a new car exactly 5 years from today. The car you wish to purchase costs $14,000 today, and your research indicates that its price will increase by 2% to 4% per year over the next 5 years.
a. Estimate the price of the car at the end of 5 years if inflation is (1) 2% per year and (2) 4% per year.
b. How much more expensive will the car be if the rate of inflation is 4% rather than 2%?
The car will cost $1,576.01 more with a 4% inflation rate than an inflation rate of 2%. This increase is 10.196% (10.2%) more ($1,576.01/ $15,457.13) than would be paid with only a 2% rate of inflation.
c. Estimate the price of the car if inflation is 2% for the next 2 years and 4% for 3 years after that.
Personal Finance Problem P5–8 Time value Misty needs to have $15,000 at the end of 5 years to fulfill her goal of purchasing a small sailboat. She is willing to invest a lump sum today and leave the money untouched for 5 years until it grows to $15,000, but she wonders what sort of investment return she will need to earn to reach her goal. Use your