answer soon as possible
Financial Management Graded pieces Application of Time Value of Money Instruction: Answer all questions. You are a financial analyst at a prominent financial institution. Your clients have different investment concerns and requires your advice in the following questions. 1. Mr. Grange is saving $225,000 per year in a savings account that is paying annual compound interest of 5%. He intends to continue this for three years after which he will move it to NCB's long-term fund which pays interest of 8% per annum compounded semi-annually How much would he be able to transfer to NCB after 3 years? [4 marks) ii. How much money will he have at the end of 7 years from today? (4 marks) A financial institution is offering a five year term deposit that will pay $% per annum compounded quarterly. If $250,000 was invested in this term deposits, a. How much money will you have at the end of four years? (4 marks) What is the EAR? (3 marks) 3. Expibe would like to receive equal instalment of $500,000 at the beginning of each year for the next 12 years. How much should the have in an investment account that pays 8% per annum in order to achieve this goal? (4 marks) 4. Janice would like to receive $15,820 each year for the next 5 years (first payment at the end of year 1). Then she hopes to receive $28,250 per year (starting at the end of year 6) for an additional 5 years. In total 10 payments. Assume an interest rate of GN. Find the present value of this cash flow stream. (5 marks) Find the future value of this cash flow stream. (5 marks) 5. Suppose you presently have $25,000 invested at IMMB, at a rate of 8% per annum, approximately how many years will it take for the investment to triple? (3 marks) 6. Paul Grant wishes to accumulate $980,000 at the end of four years so that he may make a down payment on a house which will cost $10,250,000. What should his equal end of year deposit be to accumulate $980,000 at 3% rate of interest? (4 marks) If the young man receives the remaining portion of the cost of the house from a financial institution at a rate of interest of 9% to be repaid monthly over 14 years, calculate the monthly payment for this loan. [4 maria) 7. If you wish to save $1,500,000 in four years, how much would you need to deposit at the start of each quarter to achieve this goal assuming an interest rate of 6% compounded quarterly? 14 marks] What is the present value of an annual annuity payment of $15,000 made for 11 years with a discount rate of 7% and with the first payment starting today? (4 marks) 9. You expect to deposit the following cash flows at the end of years 1 through 5, $15,000, $12,000, $19,000, $23,000 and $18,000 respectively. What is the future account value at the end of year 8 if you can earn 9% compounded annually? 16 marks) 10. Assume that you can get a loan from NCB for $264,500 for three years to buy an item of your choosing. The loan must be repaid in 36 equal monthly payments. The annual interest rate on the loan is 12 percent of the unpaid balance. How large are the monthly payments? (4 marks) 11. A friend of yours is interested in purchasing a motor vehicle with at a cost of $3.5 million, The bank has indicated that they are willing to finance 80% of the purchase price at a rate of 12% p.a. over 4 years with equal monthly repayments. Your friend has asked you to a. Compute the required monthly payments. (round to the nearest dollar) (6 marks) Prepare the Loan amortization schedule for the first 4 months (round to the nearest dollar) [5 marks] C. Determine how much would be required to close the loan after 2 % years. (4 marks)
