According in Healthcare

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Complete the following practice exercises from your textbook, Gapenski and Pink (2015), and submit the completed document or Excel file as requested in the assignment.

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I am sorry I uploaded the wrong file to chapter 4. Here is the correct oneSorry about that

9/1/2014

UNDERSTANDING HEALTHCARE FINANCIAL MANAGEMENT
Chapter 4 -- Time Value Analysis

PROBLEM 1
Find the following values for a lump sum:
- The future value of $500 invested at 8 percent for one year
- The future value of $500 invested at 8 percent for five years
- The present value of $500 to be received in one year when the opportunity cost rate is 8 percent
- The present value of $500 to be received in five years when the opportunity cost rate is 8 percent
assuming:
a. Annual compounding
b. Semiannual compounding
c. Quarterly compounding
ANSWER
1)
PV
Interest
Term

$500
8%
1

a)
Annual Compounding
FV

$540.00

b)
Semiannual Compounding:
PV
Compounding per Year
Interest
Periods
FV

$500
2
4%
2
$540.80

c)
Quarterly Compounding:
PV
Compounding per Year
Interest
Periods
FV

$0
4
2%
4
$541.22

2)
PV
Interest
Term
a)
Annual Compounding
FV
b)

$500
8%
5

$734.66

Semiannual Compounding:
PV
Compounding per Year
Interest
Periods
FV

$500
2
4%
10
$740.12

c)
Quarterly Compounding:
PV
Compounding per Year
Interest
Periods
FV

$500
4
2%
20
$742.97

3)
FV
Interest
Term

$500
8%
1

a)
Annual Compounding
PV

$462.96

b)
Semiannual Compounding:
FV
Compounding per Year
Interest
Periods
PV

$500
2
4%
2
$462.28

c)
Quarterly Compounding:
FV
Com...


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