Accounting & Finance - Assignment
Added on 2020-02-24
11 Pages1742 Words36 Views
Running head: ACCOUNTING & FINANCEAccounting & FinanceName of the UniversityName of the studentAuthors note
1ACCOUNTING & FINANCETable of ContentsAnswer to Question 1:................................................................................................................2Requirement a:.......................................................................................................................2Requirement b:.......................................................................................................................2Requirement c:.......................................................................................................................3Requirement d:.......................................................................................................................3Requirement e:.......................................................................................................................3Answer to Question 2:................................................................................................................4Requirement 1:.......................................................................................................................4Requirement 2:.......................................................................................................................5Answer to Question 3:................................................................................................................6Requirement i:........................................................................................................................6Requirement ii:.......................................................................................................................7Requirement iii:......................................................................................................................8Requirement iv:......................................................................................................................8Requirement v:.......................................................................................................................9Requirement v:.......................................................................................................................9Requirement vi:....................................................................................................................10Requirement vii:...................................................................................................................10Requirement viii:..................................................................................................................10Reference:................................................................................................................................11
2ACCOUNTING & FINANCEAnswer to Question 1:Requirement a:ParticularsAmountTotal Fund DesiredA$10,000Periodic PaymentsB$800 Interest Rate p.a.C10%Nos. of Payments p.a.D2Compound InterestE=C/D5.00%Total nos. of PaymentsF=NPER(E,B,0,(-A))9.95Nos. of Full PaymentsG=F-0.959Size of Concluding PaymentH=Bx(F-G)$760Requirement b:ParticularsAmountTotal Value of LotteryA$200,000Initial WithdrawB$20,000Investment ValueC=A-B$180,000Rate of Interest p.a.D10%Deferred Period (in years)E4Future Investment Valueafter 4 yearsF=Cx(1+D)^E$263,538Monthly Rate of InterestG=D/120.83%Nos. of Monthly PaymentsH180Size of Equal PaymentsI=(GxF)/[1-(1+G)^-H]$2,832
3ACCOUNTING & FINANCERequirement c:ParticularsAmountAnnual DepositA$4,000 Interest Rate p.a.B5%Nos. of DepositsC11Total Deposit Amount in 2017D=(1+B)xA[{(1+B)^C-1}/B]$59,669Requirement d:As per the following table, the singer would incur loss if the right would be sold now:ParticularsAmountAnnual PaymentA$20,000Interest Rate p.a.B6%Nos. of DepositsC10Present Value of the TotalPaymentsD=(1+B)xA[{1-(1+B)^-C}/B]$156,034Current Sale Price of Future RightsE$150,000Loss on SalesF=E-D($6,034)Requirement e:PeriodGrowth in AnnualPaymentsAnnualAnnuityDiscount RateDiscountedAnnuityABCD E=C/((1+D)^A)10%$1,00012%$893210%$1,10012%$877310%$1,21012%$861
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