INSTEATRINDANN~~~~~≈¦¦¦¦¦¦¦++744 1 2 3 5 6 8 9 10 11 12 13 14 15 16 18 19 20 21 17 Year Payment Amount 22 23 24 25 26 27 28 29 30 31 32 33 14 36 34 15 37 35 16 38 39 40 A 41 42 ~~~~~~ ON OG FW NOONGAWNIO 43 12 45 18 19 20 22 23 24 B 25 Nominal Rate r(m) Compounding m Effective Ann. Rate i Option A (lump sum) amount Option B (annual) amount Number of years Annuity imm. (1) or due (0) $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $0.00 C PV factor D 3.000% 2 3.02% i= (1 + i(m)/m)^m-1 $15,000,000.00 $1,125,000.00 25 0 E 1.00000 $1,125,000.00 0.97066 $1,091,994.47 0.94218 $1,059,957.26 0.91454 $1,028,859.97 0.88771 $998,675.01 0.86167 $969,375.64 0.83639 $940,935.85 0.81185 $913,330.44 0.78803 $886,534.92 0.76491 $860,525.53 0.74247 $835,279.22 0.72069 $810,773.59 0.69954 $786,986.91 0.67902 $763,898.09 0.65910 $741,486.66 0.63976 $719,732.73 0.62099 $698,617.03 0.60277 $678,120.83 0.58509 $658,225.95 0.56792 $638,914.75 0.55126 $620,170.11 0.53509 $601,975.41 0.51939 $584,314.50 0.50415 $567,171.73 0.48936 $550,531.91 0.47500 $0.00 LL Total PV(Payments) $20,131,388.51 Total FV(Payments) $41,138,055.36 PV(Payment) FV factor FV(Payment) 2.04348 $2,298,913.08 1.98353 $2,231,466.99 1.92533 $2,165,999.65 1.86885 $2,102,453.00 1.81402 $2,040,770.71 1.76080 $1,980,898.07 1.70914 $1,922,781.98 1.65900 $1,866,370.92 1.61032 $1,811,614.86 1.56308 $1,758,465.25 1.51722 $1,706,874.95 1.47271 $1,656,798.23 1.42950 $1,608,190.66 1.38756 $1,561,009.16 1.34686 $1,515,211.88 1.30734 $1,470,758.22 1.26899 $1,427,608.74 1.23176 $1,385,725.20 1.19562 $1,345,070.44 1.16054 $1,305,608.43 1.12649 $1,267,304.16 1.09344 $1,230,123.67 1.06136 $1,194,033.99 1.03023 $1,159,003.13 1.00000 $1,125,000.00 0.97066 $0.00 F G PV(t =0) FV(t =n-1) Diff: A - B H Option A: $15,000,000.00 $30,652,174.34 -$5,131,388.51 Option B: J $20,131,388.51 $41,138,055.36 -$10,485,881.02 K Grading a) 2 marks b) 2 marks c) 2 marks d) 4 marks
INSTEATRINDANN~~~~~≈¦¦¦¦¦¦¦++744 1 2 3 5 6 8 9 10 11 12 13 14 15 16 18 19 20 21 17 Year Payment Amount 22 23 24 25 26 27 28 29 30 31 32 33 14 36 34 15 37 35 16 38 39 40 A 41 42 ~~~~~~ ON OG FW NOONGAWNIO 43 12 45 18 19 20 22 23 24 B 25 Nominal Rate r(m) Compounding m Effective Ann. Rate i Option A (lump sum) amount Option B (annual) amount Number of years Annuity imm. (1) or due (0) $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $1,125,000.00 $0.00 C PV factor D 3.000% 2 3.02% i= (1 + i(m)/m)^m-1 $15,000,000.00 $1,125,000.00 25 0 E 1.00000 $1,125,000.00 0.97066 $1,091,994.47 0.94218 $1,059,957.26 0.91454 $1,028,859.97 0.88771 $998,675.01 0.86167 $969,375.64 0.83639 $940,935.85 0.81185 $913,330.44 0.78803 $886,534.92 0.76491 $860,525.53 0.74247 $835,279.22 0.72069 $810,773.59 0.69954 $786,986.91 0.67902 $763,898.09 0.65910 $741,486.66 0.63976 $719,732.73 0.62099 $698,617.03 0.60277 $678,120.83 0.58509 $658,225.95 0.56792 $638,914.75 0.55126 $620,170.11 0.53509 $601,975.41 0.51939 $584,314.50 0.50415 $567,171.73 0.48936 $550,531.91 0.47500 $0.00 LL Total PV(Payments) $20,131,388.51 Total FV(Payments) $41,138,055.36 PV(Payment) FV factor FV(Payment) 2.04348 $2,298,913.08 1.98353 $2,231,466.99 1.92533 $2,165,999.65 1.86885 $2,102,453.00 1.81402 $2,040,770.71 1.76080 $1,980,898.07 1.70914 $1,922,781.98 1.65900 $1,866,370.92 1.61032 $1,811,614.86 1.56308 $1,758,465.25 1.51722 $1,706,874.95 1.47271 $1,656,798.23 1.42950 $1,608,190.66 1.38756 $1,561,009.16 1.34686 $1,515,211.88 1.30734 $1,470,758.22 1.26899 $1,427,608.74 1.23176 $1,385,725.20 1.19562 $1,345,070.44 1.16054 $1,305,608.43 1.12649 $1,267,304.16 1.09344 $1,230,123.67 1.06136 $1,194,033.99 1.03023 $1,159,003.13 1.00000 $1,125,000.00 0.97066 $0.00 F G PV(t =0) FV(t =n-1) Diff: A - B H Option A: $15,000,000.00 $30,652,174.34 -$5,131,388.51 Option B: J $20,131,388.51 $41,138,055.36 -$10,485,881.02 K Grading a) 2 marks b) 2 marks c) 2 marks d) 4 marks
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
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