FIN 3414-Intermediate Finance Chapter 11 Commercial Mathematics
Chapter Eleven
Commercial Mathematics II
In the previous chapter, we developed the general loan pricing formula and used
those formulae
FIN 3414
Quiz 5: Chapter 10
Spring 2012
Problem 1 to 10: use the following information:
Mr. Fernandez has applied for a revolving credit line of $ 6 million to assist in marketing
a new product line.
FIN 3414
Quiz 5: Chapter 10
Spring 2012
Problem 1 to 10: use the following information:
Mr. Fernandez has applied for a revolving credit line of $ 6 million to assist in marketing a new product line.
Chapter Eight
SPECIAL TOPICS IN TIME VALUE OF MONEY
In this and following chapter we deal with some of the unconventional topics that are usually not found in the time value of
money chapters in stand
Chapter Eleven
Commercial Mathematics II
In the previous chapter, we developed the general loan pricing formula and used those formulae to develop special cases. Here
in this chapter we provide a desc
FIN 3414
Quiz 4: Chapter 6, 7 and 8
Spring 2012
1. Suppose 20 years ago your mother deposited $ 2,500 in an account earning 12% per
annum. Obtain todays value, assuming semiannual compounding.
a.
b.
c
CHAPTER 2
I: THE TIME VALUE OF MONEY Conventions & Definitions
Introduction
Beginning this chapter, we are going to learn one of the most important topics in finance, the time value of money.
Note tha
FIN 3414
Quiz 6: Chapters 11 and 12
Spring 2012
1. What must be the end-of-the-month mortgage payment amount required to repay a loan
of $52,000 in 25 years? Assume k = 0.14 (14 %) with monthly compou
CHAPTER 10
1. Ms. Silverstein has applied for a revolving credit line of $ 4 million to assist in marketing a new product line. The terms of the
loan will be as follows:
(a) All the loans will be disc
FIN 3414
Examination I Version A
Fall 2011
1. You inherited $55,000 from Auntie Paris. What is the maximum amount you can
withdraw each year forever if the interest rate is 7.5%?
a.
b.
c.
d.
e.
4,125
Chapter Five
TIME VALUE OF MONEY WITH AN ANNUITY
FUTURE VALUE OF AN ANNUITY
Let n equal deposits of an amount A are made at the beginning of each year.
What would be the future value of this annuity i
FIN 3414- Quiz 3: Chapter 4 and 5 Spring 2012
1. Suppose 20 years ago your mother deposited $ 2,500 in an account earning 12% annually. Obtain todays value.
a. 24,115.73
b. 24,116.73
c. 24,117.73
d. 2
FIN 3414
Quiz 4: Chapter 6, 7 and 8
Spring 2012
1. Suppose 20 years ago your mother deposited $ 2,500 in an account earning 12% per annum. Obtain todays value,
assuming semiannual compounding.
a. 25,7
FIN 3414
Quiz 1: Chapter 1 and Syllabus
Spring 2012
1. S=1+3+9+27+81+
a.
b.
c.
d.
e.
121
2,000
3,000,000
Infinity
None of the above
D
Solution: Since series never ends and the values of the terms keep
FIN 3414
Examination II
Spring 2012
1. Ms. R. Goslin has applied for a revolving credit line of $ 7 million to assist in marketing a new product line.
The terms of the loan will be as follows:
(a) All
Chapter Three
SIMPLE RATE OF INTEREST
FUTURE VALUE OF AN AMOUNT
Let a principal amount $P be deposited in an account that has a stated or nominal interest rate of k or 100k percent
per annum. What wil
FIN 3414
Examination II
Fall 2011
1. Ms. Silverstein has applied for a revolving credit line of $ 4 million to assist in marketing a new product line. The
terms of the loan will be as follows:
(a) All
FIN 3414
Quiz 2: Chapter 2 and 3
Spring 2012
1. How will you enter 10% in a computational formula?
a. As 110
b. As 10
c. As 0.10
d. As 1.10
e. None of the above
C
Solution:
2. What is the future value
Problem 1 and 2: use the following information.
Fine Ants Inc. is considering a project to produce super ants.
It is estimated that the initial cost of the equipment, including transportation, install
Name: _ Panther ID: _
FIN 3414
Quiz 4: Chapter 6, 7 and 8
Spring 2012
1. Suppose 20 years ago your mother deposited $ 2,500 in an account earning 12% per
annum. Obtain todays value, assuming semiannua
CHAPTER 10
1. Ms. Silverstein has applied for a revolving credit line of $ 4 million to assist in marketing a new product line. The terms of the
loan will be as follows:
(a) All the loans will be disc
FIN 3414
Quiz 6: Chapters 11-12
Spring 2012
1. What must be the end-of-the-month mortgage payment amount required to repay a loan of $52,000 in 25 years?
Assume k = 0.14 with monthly compounding.
a. 6
Problem 1 and 2: use the following information.
Fine Ants Inc. is considering a project to produce super ants.
It is estimated that the initial cost of the equipment, including transportation, install
FIN 3414
Quiz 3: Chapter 4 and 5
Spring 2012
1. Suppose 20 years ago your mother deposited $ 2,500 in an account earning 12%
annually. Obtain todays value.
a.
b.
c.
d.
e.
24,115.73
24,116.73
24,117.73
Chapter Seven
CONTINUOUS COMPOUNDING
In previous sections, the case of m compoundings per year was discussed. In the case of continuous compounding,
m is allowed to tend to infinity. The mathematical
Chapter Four
THE TIME VALUE OF MONEY WITH ANNUAL COMPOUNDING
By convention, the interest rate is always quoted in annual terms, but the compounding interval can be of any length
of time. Typically, it
Name: _ Panther ID: _
FIN 3414
Quiz 6: Chapters 11 and 12
Spring 2012
1. What must be the end-of-the-month mortgage payment amount required to repay a loan
of $52,000 in 25 years? Assume k = 0.14 with
FIN 3414-Quiz 2: Chapter 2 and 3-Spring 2012
1. How will you enter 10% in a computational formula?
a. As 110
b. As 10
c. As 0.10
d. As 1.10
e. None of the above
2. What is the future value of $12 depo
Chapter Ten
COMMERCIAL MATHEMATICS I
Financial institutions such as commercial banks, savings and loan associations, and credit unions, provide loans to individuals
and corporations and offer several