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can anyone help me with question 3. and is my answer for 1 and 2 correct? I got 3716.68 for Question 1. and I got
can anyone help me with question 3. and is my answer for 1 and 2 correct? I got 3716.68 for Question 1. and I got 210,932.38 for Question 2. any help would be greatly appreciated
Question 1 Calculate to two decimal places the present value of 4,000 due in 8.75 years' time, assuming the following effective interest rates: (1) 0.5% per annum for time between 0 and 5 years (ii) 0.25% per month for time between 5 and 6.5 years (iii) 2% per half yearly for time after 6.5 years (5 marks] Question 2 A company expects to receive 10 level annual payments of 22,500 from a customer starting on 1 July 2019 and finishing on 1 July 2028. The current date is 1 January 2018. Assuming (12) = 6% per annum, calculate the present value (at 1 January 2018) of this set of payments. [5 marks] Question 3 Alex and Anna each need 10 per week to live on. They decide to ask their dad for a weekly allowance. Alex agrees that she will receive 10 each week for one year (52 weeks). Anna noted from FT.com that she could receive 3% per annum effective interest if she put money into a savings account and then took out the 10 from the account each week. She therefore asks for 500 at the start of the year instead. The first 10 (.e. paid to Alex and paid out by Anna) is at the end of the first week. (a) Does Anna end the year in surplus or does she run out of money? [4 marks] (b) If she does have a surplus how much would it be at the end of the year? [1 marks) [Total: 5 marks] Question 1 Calculate to two decimal places the present value of 4,000 due in 8.75 years' time, assuming the following effective interest rates: (1) 0.5% per annum for time between 0 and 5 years (ii) 0.25% per month for time between 5 and 6.5 years (iii) 2% per half yearly for time after 6.5 years (5 marks] Question 2 A company expects to receive 10 level annual payments of 22,500 from a customer starting on 1 July 2019 and finishing on 1 July 2028. The current date is 1 January 2018. Assuming (12) = 6% per annum, calculate the present value (at 1 January 2018) of this set of payments. [5 marks] Question 3 Alex and Anna each need 10 per week to live on. They decide to ask their dad for a weekly allowance. Alex agrees that she will receive 10 each week for one year (52 weeks). Anna noted from FT.com that she could receive 3% per annum effective interest if she put money into a savings account and then took out the 10 from the account each week. She therefore asks for 500 at the start of the year instead. The first 10 (.e. paid to Alex and paid out by Anna) is at the end of the first week. (a) Does Anna end the year in surplus or does she run out of money? [4 marks] (b) If she does have a surplus how much would it be at the end of the year? [1 marks) [Total: 5 marks]Step by Step Solution
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