# Finances: Weekly Questions example

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Finances: Weekly Questions

Question 1

Annual payment = (r(P))/ (1-(1+)

r - interest rate

P - principal

N - number of periods

Annual payment = (0,07(5,000,000))/ (1-(1+0,0) = 350,000/1-0,3624 = 350,000/0,6376 = \$548,934

Payment for period of 15 years = 548,934 15 = \$8,234,010

Question 2

Organization current ratio is the attitude of current assets to current liabilities. Current assets include cash, plant and equipment. Current liabilities include accounts payable and long term debt. Organization current ratio = (\$600,000 + \$1,200,000)/(\$ 300,000 + \$ 300,000) = 1,800,000/600,000 = 3

Question 3

(\$500,000/ 100) 7 = \$35,000 in a year

\$35,000/12 month = \$2916,66 in a month

Question 4

\$20,000 25 = \$500,000 in 25 years

(\$500,000/100) 9% = \$45,000 in interest

\$45,000/25 = \$1,800 in interest in a year

\$20,000 + \$1,800 = \$21,800

Question 5

PV of 20 years investment = \$50,000 (1+0,08= \$50,000 0,2145 = \$10,725

The present value of a future payment of \$50,000 is worth \$10,725 today if interest rates are 8% per year.

Question 6

Part A

PV with Continuous Compounding = \$45,000/ = \$31,395.43

Part B

P = A ((1 + i) n - 3 ) / ( i (1 + i) n )

P = \$45,000((1,12)/(0,12(1,12) = \$45,000 (17-3)/ (0,12 17) = 630,000/3,4 = \$185,294

Question 7

((\$1,500/ 100) 16%) 10 = \$2,400 in 10 years

((\$3,000/ 100) 16%) 10 = \$4,800 in 10 years

First investment ROI = (2,400 - 1,500)/1,500 = 0,6

Second investment ROI = (4,800-3,000)/3,000 = 0,6

The efficiency of investments is … Disclaimer

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