finance week 5, Business Homework Help

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Business Finance

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Week 5

There are three (3) types of textbook based homework items located at the end of each chapter. These include Discussion Questions (DQ), Exercises (E), and Problems (P). Some homework items have been custom created.

Complete the following from the textbook:

  • Chapter 9: P6, P9, P10, P11, P12, P13, P15

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Explanation & Answer

Kindly find the complete paper herein

Homework Week 5


Chapter 9: P6, P9, P10, P11, P12, P13, P15

P6. Determine the present values if $5,000 is received in the future (i.e., at the end of each
indicated time period) in each of the following situations:
a. 5 percent for ten years = PV= 5000/(1+0.05)^10 = 5000/1.6288 = FV = $3,069.7446
b. 7 percent for seven years = PV= 5000/(1+0.07)^7 = 5000/1.6057 = FV = $3,113.906
c. 9 percent for four years = PV = 5000/(1+0.09)^4 = 5000/1.4115 = FV = $3,542.3308

P9. Assume you are planning to invest $5,000 each year for six years and will earn 10 percent
per year. Determine the future value of this annuity if your first $5,000 is invested at the end of
the first year.

Used formula;

FVa = PMT {(1+r)^n -1/r}
First year 5000{(1+0.10)^1 -1 /0.10} = 5000{1.10-1/.10} = 5000 (.10/.10) = $5,000
Second year; 5000{(1+0.10)^2 -1 /0.10} =5000{(1.10)^2 -1 /0.10}= 5000{1.21-1 /0.10}=
5000{.21/.10}= 5000(2.10) = FV= $10,500
Third year; 5000{(1+0.10)^3 -1 /0.10} = 5000{(1.10)^3 -1 /0.10} = 5000{1.331-1 /0.10}=
5000{.331 /0.10}= 5000{3.31} =FV= $16,550
Fourth year; 5000{(1+0.10)^4 -1 /0.10} = 5000{(1.10)^4 -1 /0.10} = 5000{1.4641-1/0.10}
=5000{.4641 /0.10} = 5000{4.641} = FV = $23,205
Fifth year; 5000{(1+0.10)^5 -1 /0.10} = 5000{(1.10)^5 -1 /0.10} = 5000{1.6105-1 /0.10} =
5000{(.6105 /0.10} = 5000{6.105} = FV = $30,525
After six years = 5000{(1+0.10)^6 -1/0.10} = 5000{1.7715-1/.10} = 5000{0.7715/0.10} =
5000...


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