FORMULAS
SWETHA VOLETI (44885806)
FISHER EQUATION
Simplified version
r i Pe
1+i
r=
1
(1+ Pe)
Full version
FUTURE VALUE (COMPOUNDING)
Simple Interest
Compound Interest
(compounding once per period)
Com
full file at http:/testbankassistant.com
Chapter 2
The Financial Environment and the Level of Interest
Rates
Learning Objectives
1.
Discuss the primary role of the financial system in the economy, and
ACST101
Lecture 1
The role of the financial manager
Financial manager makes decisions in the best interest of the company.
Stakeholders someone other than the owner
6. Alice is to due to repay $10,250 to her parents in exactly 9 months time. She has asked to
defer the repayment for a further 4 months. If the interest rate is 7% p.a compounding
monthly, what amoun
7. Suppose you deposit $10,000 in an account that pays 14.4% interest, compounded
annually for exactly 5 years.
a) At the end of 5 years indicate the following components of the account balance:
i. Pr
Simple interest formulae
100000 principal
0.062 rate of simple interest per annum
0.246575342 term of contract in years
1528.767123 total interest paid at maturity
101528.7671 future value (total paym
TUTE PROBLEMS TOPIC 2 TIME VALUE OF MONEY (TVM) PART I: SOLUTIONS
Present Value Single amount
1. Miss Y is expecting an inheritance of $1.25 million in 4 years. If she had the money today, she could
e
TUTE PROBLEMS TOPIC 3 TVM PART II: SOLUTIONS
Calculating annuity payment
1) The Bridge Bar & Grill has a 3.5 year loan of $23500 with Bankwest. It plans to repay the loan in
7 equal semi-annual instal
ACST101 Tutorial Topic 1 Solutions:
1. What effect does an increase in demand for business goods and services have on the
real interest rate? What other factors can affect the real interest rate?
An i
WEEK 5 TUTORIAL SOLUTIONS TVM (problem-solving)
Annuity Multiple rates
1. A 10-year annuity has annual payments of $4,000. The first payment is in 1 year. If interest is
6%p.a (effective annual rate)
ACST101 TOPIC 4 TUTORIAL PROBLEMS
1. In each of the following, assume a $100,000 loan to be repaid over 3 years by equal monthend repayments where the interest rate is 10.8% p.a. compounding monthly.
ACST101 Tutorial Problems Topic 1 (to discuss in week 2 Tutorial)
YOU ARE EXPECTED TO ATTEMPT THESE BEFORE THE TUTE IN ORDER TO MAXIMISE THE BENEFIT
FROM CLASS DISCUSSION
1. What effect does an increa
ACST101 - Finance 1A
WEEK 2
TIME VALUE OF MONEY (TVM) PART 1 SINGLE AMOUNTS
Learning Outcome 2: Explain key fundamental concepts in finance including
determinants of the time value of money.
Learning
Face Value
Yield rate p.a.
Yield rate per half year
Number of half year
Price
100
7.40%
3.70%
7
77.544
Input
Output
(a)
Face value
Price
Coupon rate p.a.
Coupon payment per half year
Number of half ye
Using Goal Seek to solve the question
Interest rate
n value
Annuity Present value
7.25%
15
8.965824
Inputs
Outputs
To use Goal Seek.
1. We need to input a dummy interest rate, e.g., 7.25
2. Put the fo
Question 3
Amount due (future value)
Present value
period days
Amount of interest
Rate of simple interest per period
Rate of simple interest per annum
Amount due (future value)
Present value
Using for
Q1
Interest rate per year
Deposit starting time (age)
Deposit ending time (age)
Deposit amount
Focal date (age)
Time unit
Number of 2000 deposit
Size of fund
Q2
Interest rate
Deposit starting time (ag
Using Goal Seek to find duration
Input
Output
Duration of 6 years
Yield rate (j2)
Coupon rate (j2)
Face value
Coupon per half year
Duration (half year)
Duration (year)
17.10%
8%
100
4
12.00006
6.00003
Question 3
Amount due (future value)
Present value
period days
Amount of interest
Rate of simple interest per period
Rate of simple interest per annum
Using formula
100000
98866.42
90
1133.58
0.011466
CHAPTER
1
Mathematics of Finance
1.1. INTRODUCTION
In this chapter we will discuss mathematical methods and formulae which are helpful in business
and personal finance. One of the fundamental concepts
MACQUARIE
University
This question paper may be retained by candidates.
FORMAL EXAMINATION PERIOD: SESSION 2, NOVEMBER 2015
EXAMINATION DETAILS:
j Unit Code:
I Unit Name:
! Duration of Exam
(including
F
Joseph
0
3
500P_f
5001400
(borrowed)
Joseph
0
5001400
(buys gold)
RP
3
5001400(1+0.083/12)
(repays debt)
5001400+10500
(borrowed)
Joseph
0
RP
3
10500
5001400
(buys gold)
(5001400+10500)(1+0.083/12)
MACQUARIE UNIVERSITY
Faculty of Business and Economics
ACST201: FINANCIAL MODELLING
WEEK 07 TUTORIALHPY & Duration
Question 1
A $100,000 120-day bank bill is purchased for a price of $98,144.66. When
ACST201: FINANCIAL MODELLING
WEEK 04 PRACTICAL
Questions to try before the practical
1. Calculate the maturity value, and then the annualised (simple interest) yield, if
$100,000 is invested for 145 d
MACQUARIE UNIVERSITY
Faculty of Business and Economics
ACST201: FINANCIAL MODELLING
WEEK 05 PRACTICALBOND PRICING
Questions to try before the practical
1. Find the price, to yield 6% net, of a 10-year