Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Let us assume that you deposit Rs.1000 in a bank that pays 10 percent interest compounded yearly for a period of 3 years. The deposit will grow as given details:
First Year
Principal at the beginning. Interest for the year (1000x.10) Total amount
Rs.
1000
100
1100
Second Year
Principal at the beginning. Interest for the year (1100x.10). Total Amount
110
1210
Third Year
Principal at the beginning. Interest for the year (1210x.10)
Total Amount
121
1321
To acquire the future value from current value for one year period:
FV = PV + (PV . k)
Here PV = Present Value;
k = Interest rate
FV = PV (1 + k)
As the same for a two year period:
FV = PV
+ (PV × k)
+ (PV × k × k)
Principal amount
First period interest on principal
Second period interest on the principal
Second periods interest on the first periods interest
FV = PV+PVk+PVk+PVk2
= PV+2PVk+PVk2
= PV (1+2k+K2) = PV (1+k)2
Hence, the future value of amount after n periods is as:
FV = PV (1+k)n ............................Eq(1)
Here FV = Future value n years thus
PV = Cash today or present value
k = Interest rate par year in percentage
n = number of years for that compounding is done
Equation (1) is the fundamental equation for compounding analysis. Here the factor (1+k)n is considered as the future value interest factor or the compounding factor (FVIFk,n). Published tables are obtainable showing the value of (1+k)n for different combinations of k and n. In such table is specified in appendix A of this section.
Profits in subsidiary company The remaining profits that belong to the holding company should be split between pre-acquisition profits and post acquisition profits. The pre
A player for a Rice team, Jim Jones, is graduating this year and is considering a career in professional sports. The alternative is to work for two years and then attend business s
Q. Internal Control Over Financial Reporting? Internal Control Over Financial Reporting - A process designed by, or under supervision of company's principal executive and princ
Right of indemnity If the Official Receiver or trustee has seized or disposed of any property in the possession of the debtor, without notice or claim relating thereto, he is
Do we recognise revenue if it will be assigned to other party ?
a) A company has 7000 obsolete toys carried in inventory at a manufacturing cost of $6 per unit. If the toys are reworked for $2 per unit, they could be sold for $3 per unit. If th
Copper Suppliers, Inc. (CS), is a distributor of commercial grade copper. CS purchases copper directly from copper mines and then after refining it, sells the refined copper to in
QUESTION 1: The Alpha Company Ltd was registered with Nominal Capital of 60,000 Equity shares of Rs.10 each. The following were the ledger balances on 31st March 2011.
In the current year, Company A is formed with $630,000 in capital from the sale of 21,000 shares of stock at $30 a share. Company A, which has no other operations, immediately acqu
Q. Effect of Additional Debt Finance on Financial Position? Debt finance of $3·2m would raise gearing on a book value basis from 54% to 203% ((1167 + 3200)/2150) which is five
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd