Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
The interest rate for all problems is 7% I need help with #8-10 and #13 -15.
Question 8 is asking to solve for the monthly payment
#9 is asking to solve for amount of annual payment
#10 is asking for
| Calculate for the cells highlighted in yellow | |||||||
| For these problems where interest rate is needed use: | 7% | ||||||
| Amount of investment: | $ 5,000 | ||||||
| Number of years to maturity: | 10 | ||||||
| #1 | Amount to be received at maturity: | ||||||
| Amount of loan: | $ 10,000 | ||||||
| Life of loan (years): | 15 | ||||||
| #2 | Annual payment | ||||||
| #3 | Amount of principal in first payment | ||||||
| #4 | Amount of principal in last payment | ||||||
| Future value | $ 25,000 | ||||||
| Maturity in years: | 20 | ||||||
| #5 | Present value | ||||||
| Amount of investment: | $ 500 | ||||||
| Number of years to maturity: | 15 | ||||||
| Amount to be received at maturity: | $ 2,500 | ||||||
| #6 | |||||||
| Annual investment | $ 2,500 | ||||||
| Life of investment (years) | 10 | ||||||
| #7 | Future value | ||||||
| Price of car | $ 12,000 | ||||||
| Down payment | 20% | ||||||
| Life of loan (years) | 3 | ||||||
| #8 | Monthly payment | ||||||
| Amount to be received at maturity | $ 25,000 | ||||||
| Number of years | $ 10 | ||||||
| #9 | Amount of annual payment | ||||||
| Year: | 0 | 1 | 2 | 3 | 4 | 5 | |
| Cash flows | $ (10,000) | 2500 | 2500 | 2500 | 2500 | 2500 | |
| #10 | Net present value: | ||||||
| Additional problems: | |||||||
| YEAR | 1 | 2 | 3 | ||||
| Income Statement | |||||||
| Tax rate: | 30% | ||||||
| #11 | Sales | 65,000 | 76,700 | ||||
| Cost of Goods Sold | 40,000 | ||||||
| #12 | Gross Profit | ||||||
| Selling, General, & Administrative Expense | 12,500 | ||||||
| 1,750 | |||||||
| Income before Tax | (14,250) | ||||||
| #13 | Tax Expense | ||||||
| #14 | Net Income | ||||||
| #15 | Gross Profit Margin | ||||||
| #16 | Amount Depreciation Expense reduces Cash | ||||||
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