Business Finance: Answers to 10 Questions

This article provides answers to 10 questions related to business finance including calculations for present value, future value, interest rate, and more.

Running head: BUSINESS FINANCE
Business Finance
Name of the Student:
Name of the University:
Author’s Note:

2BUSINESS FINANCE
Table of Contents
Answer to Question 1:................................................................................................................3
Answer to Question 2:................................................................................................................3
Answer to Question 3:................................................................................................................3
Answer to Question 4:................................................................................................................4
Answer to Question 5:................................................................................................................4
Answer to Question 6:................................................................................................................4
Answer to Question 7:................................................................................................................5
Answer to Question 8:................................................................................................................5
Answer to Question 9:................................................................................................................6
Answer to Question 10:..............................................................................................................6
Bibliography:..............................................................................................................................7

3BUSINESS FINANCE
Answer to Question 1:
Particulars Amount
Compounding Periods A 12
Interest Rate B 7%
Nominal Interest Rate
C= Ax[(1+B)^(1/A) -
1] 6.78%
Answer to Question 2:
Particulars Amount
Opening Date A 19-07-2018
Closing Date B 05-03-2019
Nos. of Days C=B-A 229
Investment Amount D $ 10,400.00
Simple Interest Rate E 6%
Present Value F=Dx[1/(1+E)x(365/C)] $ 10,022.71
Answer to Question 3:
Particulars Amount
Periodic Payment A $ 900.00
Interest Rate p.a. B 10.60%
Nos. of Payments p.a. C 2
Total Period D 9
Half Yearly Interest Rate E=B/C 5.30%
Total nos. of Payments F=CxD 18
Present Value of Investment
G=Ax[1-(1+E)^-
F]/E $ 10,278.34

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Answer to Question 4:
Particulars Amount
Nos. of Days A 188
Investment Amount B $ 51,000.00
Simple Interest Rate C 6%
Present Value
D=Bx[1/(1+C)x(3
65/A)] $ 49,471.14
Answer to Question 5:
Particulars Amount
Annual Payment A $ 40,000.00
Interest Rate p.a. B 5.00%
Nos. of Payments p.a. C 1
Total Period D 11
Half Yearly Interest Rate E=B/C 5.00%
Total nos. of Payments F=CxD 11
Present Value of Investment
G=Ax[1-(1+E)^-
F]/E $ 3,32,256.57
Answer to Question 6:
Particulars Amount
Present Value A $ 60,000.00
Future Value B $ 60,973.18
Interest C=A-B $ 973.18
Opening Date D 20-06-2018
Closing Date E 13-01-2019
Nos. of Days F=E-D 207
Simple Interest Rate p.a. G=(C/A)x(365/F) 2.86%

5BUSINESS FINANCE
Answer to Question 7:
Particulars Amount
Future Value A $ 6,600.00
Interest Rate B 8.70%
Period (in yrs.) C 0.33
Present Value D=A/1+(BxC) $ 6,413.99
Answer to Question 8:
Particulars Amount
Opening Date A 13-01-2018
Closing Date B 13-01-2020
Period in Years C 2
Present Value D $ 8,000.00
Interest pa. E 11%
Nos. of Payments in a year F 4
Qaurterly Interest Rate G=E/F 2.75%
Total nos. of Payments H=CxF 8
Value of Investment I=Dx(1+G)^H $ 9,939.04
Particulars Amount
Opening Date A 13-01-2020
Closing Date B 13-01-2024
Period in Years C 4
Present Value D $ 9,939.04
Interest pa. E 11%
Nos. of Payments in a year F 4
Qaurterly Interest Rate G=E/F 2.75%
Total nos. of Payments H=CxF 16
Value of Investment I=Dx(1+G)^H $ 15,345.57
Interest Earned J=I-D $ 5,406.53

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Answer to Question 9:
Particulars Amount
Initial Invetsment A $ 1,179
Future Value B $ 1,275.81
Total Interest Earned C=B-A $ 96.81
Interest Rate p.a. D 9%
Annual Interest E=AxD $ 106.11
Total Period (in days) F=(C/E)x365 333
Answer to Question 10:
Particulars Amount
Monthly Payment A $ 80.00
Interest Rate B 5%
Period (in years) C 28
No. of Payments in a year D 12
Nos. of Monthly Payments E=CxD 336
Monthly Interest Rate F=B/D 0.42%
Accumulated Fund
G=Ax[(1+
F)^E-1]/F $ 58,433.71

7BUSINESS FINANCE
Bibliography:
Aswath, D., 2016. Investment valuation
Damodaran, A., 2016. Damodaran on valuation: security analysis for investment and
corporate finance (Vol. 324). John Wiley & Sons.