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    CFA Test

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    Aslam Soni
    A company borrows $75,000 at the rate of 10%. The loan will be paid off in three equal end-of-year installments. A couple wants to accumulate $50,000 over the next ten years. How much should they deposit in the bank every year given that the expected rate of return is 8%?

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    CFA Test

    Uploaded by

    Aslam Soni
    32 views15 pages
    A company borrows $75,000 at the rate of 10%. The loan will be paid off in three equal end-of-year installments. A couple wants to accumulate $50,000 over the next ten years. How much should they deposit in the bank every year given that the expected rate of return is 8%?

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    CFA test

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    A company borrows $75,000 at the rate of 10%. The loan will be paid off in three equal end-of-year installments. A couple wants to accumulate $50,000 over the next ten years. How much should they deposit in the bank every year given that the expected rate of return is 8%?

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    32 views15 pages

    CFA Test

    Uploaded by

    Aslam Soni
    A company borrows $75,000 at the rate of 10%. The loan will be paid off in three equal end-of-year installments. A couple wants to accumulate $50,000 over the next ten years. How much should they deposit in the bank every year given that the expected rate of return is 8%?

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
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    A company borrows $75,000 at the rate of 10%. The loan will be paid off in three equal end-of-year installments.

    Calculate the amount of the annual payments

    A company borrows $75,000 at the rate of 10%. The loan will be paid off through equal monthly installments over three years. Calculate the monthly payment required to pay off the loan

    Ben company borrows $25,000 at an interest rate of 7%. The amount will be paid back in semiannual installments over 14 years. Calculate the outstanding balance of the loan after the second payment is made.

    A couple wants to accumulate $50,000 over the next ten years. How much should they deposit in the bank every year given that the expected rate of return is 8%

    Salman has $500 in the bank on which he earns an annual 10% return. How many annual end-of-year withdrawals of $120 can he make?

    Suppose that we have the opportunity to invest $150 at the end of each of the next 5 years in exchange for $850 after 5 years. What is the annual rate of return on this investment?

    Suppose you have to make 5 annual payments of $1,500 starting at the beginning of year 5. To accumulate the money to meet these obligations, we want to make 4 equal annual deposits beginning at the end of year 1. Assuming a 12 rate of return , what amount must be deposited for 4 years to satisfy the eventual payment obligations?

    ABC Corporation is preparing a feasibility study for a project that has an initial cost of $8 million. It will generate no cash flows in first year. However the project will generate positive cash flows of $2 million at the end of the 2nd year, $3.2 million at the end of the third year and $3.3 million at the end of the fourth year. Assume that the discount rate is 12%, calculate the NPV of the project and determine whetahjer the company should invest in it.

    Calculate the IRR of a project with an initial cost of $10 million. This project generates positive cash flows of $3 million at the end of year1, $4.8 million at the end of Year 2 and $5.5 million at the end of year 3.

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