# WK5 Quantitative Techniques In Financial Valuation

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# Apply: Quantitative Techniques in Financial Valuation Problem Set

• Due Feb 04, 11:59 PM
• Not Submitted
• POINTS 10
• Practice/Simulation/Homework/Game

Objectives:

Resources: Quantitative Techniques in Financial Valuation Problem Set Excel® Template

Save the Quantitative Techniques in Financial Valuation Problem Set Excel® Template to your computer.

Read the instructions on the first tab.

Complete the twelve exercises located in the template and record your answers in the highlighted spaces.

Click the Assignment Files tab to submit your assignment.

Instructions: Week 5 Individual Assignment Total Number of Questions - 12 Total Points: 6 1. You have twelve problems - on each tab of this Excel file. 2. Please show your work in the cells. Use Excel formulas instead of writing the values/answers directly in the cell. The instructor will then know where you made a mistake and provide you valuable feedback and partial credit (if appropria back and partial credit (if appropriate). Find the interest paid on a loan of \$1,200 for three years at a simple interest rate of 5% per year. How much money will you pay after three years? Principal Rate Time Simple Interest (SI) Maturity Value Find the maturity value of a loan of \$1,750 for 28 months at 9.8% simple interest per year. Principal Rate Time Simple Interest (SI) Maturity Value -- Please make sure that the time periods for Time and Rate match. Find the simple interest rate of a loan of \$5,000 that is made for three years and requires \$1,762.50 in interest. Principal Time SI Rate 762.50 in interest. A loan of \$16,840 is borrowed at 9% simple interest and is repaid with \$4,167.90 interest. What is the duration of the loan? Principal Rate SI Time How much money is borrowed if the interest rate is 9.25% simple interest and the loan is made for 3.5 years and has \$904.88 interest? SI Rate Time Principal Find the ordinary and exact interest for a loan of \$1000 at a 5% annual interest rate. The loan was made on March 15 and is due May 15. Loan date Loan Due Date Exact time Principal Rate Time Ordinary Simple Interest (SI) days Loan date Loan Due Date Exact time Principal Rate Time Exact Simple Interest (SI) days Find the bank discount and proceeds using ordinary interest for a loan to Michelle Anders for \$7,200 at 8.25% annual simple interest from August 8 to November 8. Loan date Loan Due Date Exact time Face Value (F) Discount Rate (D) Time Period (T) Bank Discount (B) Proceeds (P) days years --> 'Convert Exact time in days to years What is the effective interest rate of a simple discount note for \$8,000, at an ordinary bank discount rate of 11%, for 120 days? Face Value (F) Discount Rate (D) Time Period (T) Bank Discount (B) Proceeds (P) Rate years --> 'Convert Exact time in days to years SOLVED EXAMPLE What is the effective interest rate for the ﬁrst year for a loan of \$20,000 for three years if the interest is compounded quarterly at a rate of 12%? Quoted Rate 12,00% quarterly No. of compounding periods per year EAR 4 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; fo 12,55% 1. Ross Land has a loan of \$8,500 compounded quarterly for four years at 6%. What is the effective interest rate for the ﬁrst y Quoted Rate No. of compounding periods per year EAR For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; fo 2. Find the effective interest rate for the ﬁrst year for a loan for four years compounded semiannually at an annual rate of 2% Quoted Rate No. of compounding periods per year EAR For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; fo 3. What is the effective interest rate for the ﬁrst year for a loan of \$5,000 at 10% compounded daily for three years? Quoted Rate No. of compounding periods per year EAR For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; fo 4. Depending on the issuer, a typical credit card agreement quotes an interest rate of 18 percent APR. Monthly payments are What is the actual interest rate you pay on such a credit card? Quoted Rate No. of compounding periods per year EAR For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; fo =EFFECT(B30, B31) 5. Find the effective interest rate for a loan of \$3,500 at 10% interest compounded quarterly. Quoted Rate No. of compounding periods per year EAR For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; fo =EFFECT(B36, B37) SOLVED EXAMPLE Tim Bowling has \$20,000 invested for three years at a 5.25% annual rate compounded daily. How much interest will he earn? Initial Investment (PV) Quoted Rate Compounding Frequency Number of compoundings (m) Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Ending Amount (FV) Compound Interest \$20.000 5,25% Daily 365 0,0144% 3 1095 \$23.411,35 \$3.411,35 Choose one For Quarterly, type 4; for semiannually, type 2; for a Exercise Find the future value of a \$15,000 money market investment at 2.8% annual interest compounded daily for three years. Initial Investment (PV) Quoted Rate Compounding Frequency Number of compoundings (m) Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Ending Amount (FV) Compound Interest for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 SOLVED EXAMPLE The Holiday Boutique would like to put away some of the holiday profits to save for a planned expansion. A total of \$8,000 is needed in three years. How much money in a 5.2% three-year certificate of deposit that is compounded monthly must be invested now to have the \$8,000 in three years? Future Value Needed (FV) Quoted Rate Compounding Frequency Number of compoundings (m) Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Amount Invested Now (PV) \$8.000 5,2% Monthly 12 0,4333% 3 36 \$6.846,78 Choose one For Quarterly, type 4; for semiannually, type 2; for a Exercise How much should be invested now to have \$15,000 in six years if interest is 4% compounded quarterly? Future Value Needed (FV) Quoted Rate Compounding Frequency Number of compoundings (m) Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Amount Invested Now (PV) r semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Jamie Juarez needs \$12,000 in 10 years for her daughter’s college education. How much must be invested today at 2% annual interest compounded semiannually to have the needed funds? Future Value Needed (FV) Quoted Rate Compounding Frequency Number of compoundings (m) Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Amount Invested Now (PV) Choose one For Quarterly, type 4; for semiannually, type 2; for annually, ty A loan of \$8,000 for two acres of woodland is compounded quarterly at an annual rate of 6% for ﬁve years. Find the compound amount and the compound interest. Initial Investment (PV) Quoted Rate Compounding Frequency Number of compoundings (m) Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Ending Amount (FV) Compound Interest Choose one For Quarterly, type 4; for semiannually, type 2; for annually, ty ually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 ually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365

Tutor_Booth
School: Carnegie Mellon University

Hey! Kindly find the attached answer. Thank you and all the best.

Instructions:
Week 5 Individual Assignment
Total Number of Questions - 12
Total Points: 6

1. You have twelve problems - on each tab of this Excel file.
The instructor will then know where you made a mistake and provide you valuable feedback and partial credit (if appropria

back and partial credit (if appropriate).

Find the interest paid on a loan of \$1,200 for three years at a simple interest rate of 5% per year.
How much money will you pay after three years?
Principal
Rate
Time

\$1.200
5%
3

Simple Interest (SI)
Maturity Value

\$180 =PRODUCT(B4:B6)
\$1.380 =Principal + SI

Find the maturity value of a loan of \$1,750 for 28 months at 9.8% simple interest per year.
Principal
Rate
Time

\$1.750
9,80%
2,33 -- Please make sure that the time periods for Time and Rate match.

Simple Interest (SI)
Maturity Value

\$400 =PRODUCT(B3:B5)
\$2.150 =Principal + SI

Find the simple interest rate of a loan of \$5,000 that is made for three years and requires \$1,762.50 in interest.
Principal
Time
SI
Rate

\$5.000
3,00
\$1.762,50
11,75%

762.50 in interest.

A loan of \$16,840 is borrowed at 9% simple interest and is
repaid with \$4,167.90 interest. What is the duration of the loan?
Principal
Rate
SI
Time

\$16.840
9,00%
\$4.167,90
2,75 years
33 months

How much money is borrowed if the interest rate is 9.25% simple interest
and the loan is made for 3.5 years and has \$904.88 interest?
SI
Rate
Time
Principal

\$904,88
9,25%
3,50
\$2.795,00

Find the ordinary and exact interest for...

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Anonymous
awesome work thanks

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