Business Finance: Comprehensive Financial Analysis and Calculations

This assignment provides detailed solutions to various business finance problems, covering topics such as nominal interest rate calculation, simple interest calculations, present value of investments, and future value calculations. It includes calculations for periodic payments, interest rates, and the impact of compounding periods on investment returns. The assignment also addresses scenarios involving different payment frequencies (half-yearly, quarterly, monthly) and their effects on accumulated funds and interest earned. Formulas and step-by-step calculations are provided for each question, offering a comprehensive understanding of financial analysis and investment strategies. Desklib offers more solved assignments and resources for students.

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

4BUSINESS FINANCE
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

6BUSINESS FINANCE
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.