# BUSN379 Homework Week 2

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BUSN379 Homework Week 2
You need to compute “r”. Assume the PV is \$1. The future value is \$13,113. The periods or time…

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## BUSN379 Homework Week 2

BUSN379 Homework Week 2

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Chapter 4: 8, 17, and 18

Chapter 5: 1, 4, and 12

Instructions:

• If you used excel for your calculations, please fill in your results in this template and submit along with your Excel sheet.
• If you used a financial calculator, provide your inputs.
• If you used an online calculator, provide a snapshot at all possible.
• If you used a formula, write down your step-by-step calculations.
• Please complete all items highlighted in yellow.

Note: you will not receive credit for items without calculations

Chapter 4

Exercise #8.

You need to compute “r”. Assume the PV is \$1. The future value is \$13,113. The periods or time are 131. You can compute r by using the following methods:

1. Solving for interest in your financial calculator.
2. Using the following formula: r=(FV/PV)1/t – 1
3. Using the following online calculator (easiest method): http://www.moneychimp.com/calculator/discount_rate_calculator.htm

Provide a snapshot of your online calculator, your formula or the financial calculator inputs.

Exercise #17

You need to compute the PV.

1. Solving for PV in your financial calculator.
2. Using the following formula: PV=FV/(1+r)t
3. Using the following online calculator (easiest method): http://zenwealth.com/businessfinanceonline/TVM/TVMExercise.html

Provide a snapshot of your online calculator, your formula or the financial calculator inputs.

Exercise #18

You need to compute the FV.

1. Solving for FV in your financial calculator.
2. Using the following formula: FV=PV(1+r)t
3. Using the following online calculator (easiest method): http://zenwealth.com/businessfinanceonline/TVM/TVMExercise.html

Provide a snapshot of your online calculator, your formula or the financial calculator inputs.

Chapter 5

Exercise #1

To solve this exercise, you need to find the PV of each cash flow and add them up. You can:

1. Solve for PV for each cash flow in your financial calculator. Then add them all up.
2. Solve for PV using the following formula: PV=FV/(1+r)t . Then add them all up.
3. Using the following online calculator (easiest method): http://zenwealth.com/businessfinanceonline/TVM/CFCalcExercise.html

Provide a snapshot of your online calculator, your formula or the financial calculator inputs.

Exercise #4:

(a) If the required return is 8 percent, what is the value of the investment? What would the value be if the payments occurred for 40 years? For 75 years?

You need to find the PV of an annuity. To do so, you can:

1. Solve for PVA in your financial calculator.
2. Use the formula on Page 132 – The Present Value Annuity
3. Using the following online calculator (easiest method): http://zenwealth.com/businessfinanceonline/TVM/TVMCalculator.html

Provide a snapshot of your online calculator, your formula or the financial calculator inputs.

Exercise #12

Here you need to find the EAR. There are two ways:

1. You can use the formula EAR = [1 + (APR / m)]m – 1
2. Use an online calculator (easiest method): http://www.pine-grove.com/online-calculators/equivalent-rate-calculator.htm

Provide a snapshot of your online calculator, your formula or the financial calculator inputs.