Week 6 VA-HOANG KIM TO
xlsx
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School
Webster University *
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Course
5020
Subject
Industrial Engineering
Date
Jan 9, 2024
Type
xlsx
Pages
2
Uploaded by DeanPencilCobra27
bgs
Name:
HOANG KIM TO
ID:
4234529
Directions: Complete the 4 tasks below.
1) Billy Bob deposits $2000.00 in an account that pays 4.25% compounded annually.
How much will BB have in his account in 10 years?
$
2,000.00
4.25%
10
0.0425
a) Solve using algebra:
$3,032.43
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Using a ' mark, copy the formula used in a (cell F11) here:
'2000*((1+0.0425)^10)'
b) Solve using Excel functions;
($3,032.43)
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Using a ' mark, copy the formula used in cell F15 here:
'FV(0.0425,10,0,2000,0)
2) Fifteen years ago, Bob purchased an investment for $1,500.
If the investment
averaged 6% per year return.
How much is the investment worth today?
Identify variables given;
$1,500
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6%
15
a) Solve problem by referencing the cell addresses of variables you have identified;
Answer
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$3,594.84
($3,594.84)
3) A $1000 deposit in an account earns interest at an annual nominal rate of 8.00%. Interest
is compounded monthly in the account.
How much money will be in the account
at the end of the 10th year?
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Identify variables given;
0.00666667
120
$1,000
8%
12
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$10.00
a) Solve the problem using the cells above.
Answer
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($2,219.64)
b) What is the EAR of the rate above compounded monthly?
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8.3%
4) A zero-coupon bond matures in 10 years and will be worth $1000.00 to the holder.
If the bond
was purchased 10 years ago, and yielded a return of 5% per year, how much
did the holder pay for the bond? (Assume annual compounding, and answer to the
nearest cent-$0.01).
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$613.91
5) Big Corporation had the following sales over the last 4 years;
Year
Sales (in 000s)
AGR
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1
225.00
2
236.25
5%
3
243.125
2.9%
4
248.00
2%
a) What was the growth rate in sales between years 1 & 2;
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5%
b) What is the growth rate in sales between years 3 & 4;
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2%
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3% (hint: this is a geometric mean)
6) Calculate the EAR for the following annual nominal rates;
Annual Rt.
Compounding/yr
10.000%
semi-annual
10.25%
9.875%
monthly
10.33%
9.625%
daily
10.1%
c) What is the average annual growth
rate for these years?
7) Complete the missing variables in the table below;
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Annual nominal
Cmpd/year
# years
I%/yr (nom)
PV
FV
1
1
10.0%
$
1,000.00
($1,100.00)
1
5
10.0%
$
1,000.00
($1,610.51)
1
10
10.0%
$
1,000.00
($2,593.74)
0.1
1
10
5.0%
$
1,000.00
($1,628.89)
0.05
4
5
10.0%
$
1,000.00
($1,638.62)
0.025
20
12
5
10.0%
$
1,000.00
($1,645.31)
0.008333333333333
60
1
10
5.00%
$1,227.83 $
2,000.00
1
10
10.00%
$771.09 $
2,000.00
1
5
10.00%
$1,241.84 $
2,000.00
4
5
10.00%
$1,220.54 $
2,000.00
0.025
20
12
5
10.00%
$1,215.58 $
2,000.00
0.008333333333333
60
1
5
6.0%
$
1,000.00 $
1,338.23
1
10
4.0%
$
1,000.00 $
1,480.24
12
10
0.8%
$
1,000.00 $
2,451.36
0.008333333333333
120
1
9
8.00%
$
1.00 $
2.00
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