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!
Determine the future value of Rs.1000 compounded continuously for 5 year on the interest rate of 12 percent per year and contrast it along with annual compounding.
Solution:
FV=5 = PVeN(APR)
= 1000 * 2.71828
= 1000 * 2.71828.60
= 1000 * 1.82212
FV=5 = PV (1 + k)n
= 1000 (1 + .12)5
= 1000 (1.7623)
= 1762.3
From this illustration you can very well notice the effects of extreme frequency of compounding.
until now in our discussion we have supposed that the interest rate is going to stay the same over the life of the investment, although now a days we are witnessing an raised volatility in interest rates as a effect of that the financial instruments are designed in a manner that interest rates are benchmarked to a specific variable and along with the change in which variable the interest rates also change consequently.
In that case the Future Value is calculated by this equation:
FVn = PV(1 + k1 ) (1 + k2 ) (1 + k3 ) + ... (1 + kn )
Here kn is the interest rate for period n.
Q. Estimate cost of equity using market values? The cost of equity as well as cost of debt should always be estimated using market values. If the approximate cash flows of a
Terry Corporation had 300,000 shares of common stock outstanding at December 31, 2010. In addition, it had 90,000 stock options outstanding, which had been granted to certain execu
How useful is accounting information? No one would seriously claim that accounting information fully meets all of the needs of every various user groups. Accounting is still a
Problem1 Derive from first principles an expression for the variance of the benefits payable under an endowment assurance with benefits payable at the end of the year of death.
Determine the term- Understandability Accounting reports must be expressed as clearly as possible and must be understood by those at whom the information is aimed.
Assets 1) The classification of investments in the Balance Sheet will be under a few broad headings with schedules listing the individual assets. Where the Trustees Act has been
XYZ Company is a large manufacturer of auto parts for the auto manufacturers and parts distributors. XYZ has plants throughout the world, but most are located in North America. XYZ
You will gain welfare from consuming bread and chocolate. Your welfare is described numerically by W = 4B + 2C, where B denotes the quantity of bread you choose to consume, and C d
Sheridon Corporation is investigating automating a process by purchasing a new machine for $515,000 that would have a 10 year useful life and no salvage value. By automating the pr
how to prepare
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd