# Homework in BUSSFIN

**Pages:**16 (356 words)

**Published:**July 21, 2014

Submitted to: Mr. Baylon

5-29.

10.30%

firm

12.75%

bank

2.45%

increase

5-30.

a.

25

60.18

Erika

85.18

25

19.23

Kitty

44.23

b.

($2,985.06)

c. I think its rational because the mutual funds are invested in high quality bonds which reaps a sure 6% per year interest. On the other hand, the 20% average per year interest on the newly issued bio-tech stocks are somehow a bit risky because you can never know whether the new companies will be productive or not or if the stocks will be higher in the coming years.The interest is very enticing but the risk is also high. So, I think it’s a safe bet to invest in the bond.

5-31.

a.

($35,459.51)

b.

$37,232.48

5-32.

1500

1749.60

1889.57

2040.73

2203.99

9383.89

10000.00

Answer

616.11

5-33.

Answer

17708.50

5-34.

a. Loan ammortization schedule, $25,000.00 at 10% for 3 years

Amount borrowed:

$ 25,000.00

Years:

3

Rate:

10%

Payment:

-$10,052.87

Year

Beginning Amount

Payment

Interest

Repayment of Principal

1

$ 25,000.00

$10,052.87

$ 2,500.00

$7,552.87

2

$ 17,447.13

$10,052.87

$ 1,744.71

$8,308.16

3

$ 9,138.97

$10,052.87

$ 913.90

$9,138.97

b.

24.87%

75.13%

17.36%

82.64%

9.09%

90.91%

Interest

Principal

These changes over time because of the payments made yearly.

5-35.

Amount borrowed:

$ 100,000.00

Years:

3

Rate:

7%

Payment:

-$38,105.17

a.

The payment would be $38,105.17.

I can't afford that payment given my annual salary

Amount borrowed:

$ 100,000.00

Years:

30

Rate:

7%

Payment:

-$8,058.64

b.

The payment would be $8,058.64.

Still, I can't afford that payment given my annual salary.

Amount borrowed:

$ 100,000.00

Years:

30

Rate:

7%

Payment:

-$8,058.64

Year

Beginning Amount

Payment

Interest

Repayment of the Principal

Ending Balance

1

$ 100,000.00

$8,058.64

$ 7,000.00

$1,058.64

$ 98,941.36

2

$ 98,941.36

$8,058.64

$ 6,925.90

$1,132.75

$ 97,808.61

3

$ 97,808.61

$8,058.64

$ 6,846.60

$1,212.04

$ 96,596.58

c.

$ 96,596.58

5-36.

a.

50.00

months

b.

12.92

months

c.

37.080

5-38.

$41,651.46

$100,000.00

$20,000.00

Answer$161,651.46

Spreadsheet Problem, 5-41.

Period

PV

Rate

a.

5

$1,000.00

10%

FV=

$1,610.51

b.

Future Value of

$ 1,000.00

FV=1000(1+i)^n

Rates

Periods

0%

5%

20%

0

$1,000.00

$1,000.00

$1,000.00

1

$1,000.00

$1,050.00

$1,200.00

2

$1,000.00

$1,102.50

$1,440.00

3

$1,000.00

$1,157.63

$1,728.00

4

$1,000.00

$1,215.51

$2,073.60

5

$1,000.00

$1,276.28

$2,488.32

c.

Period

Rate

FV

5

10%

$ 1,000.00

PV=

($620.92)

d.

Period

PV

FV

5

$ 1,000.00

$ 2,000.00

Rate=

15%

e.

Population

Expected

Rate

36.5

73

2%

Period=

35.0

f.

Payments

Rate

Period

$1,000.00

15%

5

PV=

$3,352.16

FV=

$13,484.76

g.

Payments

Rate

Period

$1,000.00

15%

5

PV=

$3,854.98

$3,352.16

15%

change

FV=

$15,507.48

$13,484.76

15%

change

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