Week 3 Fin 419 Assignment Essay
1057 WordsMay 30th, 20135 Pages
FIN/419 - Week 3 Individual Assignment form the readings
P4–23 (LG-2/LG-3) Funding your retirement you plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive $20,000 at the end of each year for the 30 years between retirement and death (a psychic told you would die exactly 30 years after you retire). You know that you will be able to earn 11% per year during the 30-year retirement period.
a. How large a fund will you need when you retire in 20 years to provide the 30-year, $20,000 retirement annuity? n= 30 r= 11.00% PVIFA= 30 periods, 11% Rate = 8.693793
Annuity= 20,000 / Present value = $173,876 = 20000 X 8.693793
Answer= $ 173,876 Retirement money required
b. How much will you…show more content…
Explain why the interest portion of each payment declines with the passage of time.
Because it is through the annual end of the year payments and the principle balance of the loan is declining creating less interest to be accrued on the original balance.
P4–48 (LG-6) Monthly loan payments Tim Smith is shopping for a used car. He has found one priced at $4,500. The dealer has told Tim that if he can come up with a down payment of $500, the dealer will finance the balance of the price at a 12% annual rate over 2 years (24 months).
a. Assuming that Tim accepts the dealer’s offer, what will his monthly (end-of-month) payment amount be?
a. PMT=$4,000 ÷ (PVIFA 1%, 24) PMT=$4,000 ÷ (21.243) PMT= $ 188.28 Answer: $ 188.28
b. Use a financial calculator or Equation 4.15a (found in footnote 9) to help you figure out what Tim’s monthly payment would be if the dealer were willing to finance the balance of the car price at a 9% annual rate. PMT=$4,000 ÷ (PVIFA 0.75%, 24) PMT=$4,000 ÷ (21.889) PMT= $ 182.74 Answer: $ 182.74
P6–15 (LG-6) Basic bond valuation Complex Systems has an outstanding issue of $1,000-parvalue bonds with a 12% coupon
2Financial Ratio AnalysisIn this assignment Learning Team C will be calculating and analyzing financial reports from two of the largest grocery chain outlets in the world: Kroger and Wal-Mart. "The Kroger Co. (NYSE: KR) is one of the world's largest grocery retailers, with fiscal 2015 sales of $109.8 billion. The Kroger Co. Family of Stores spans many states with store formats that include grocery and multi-department stores, discount, convenience stores and jewelry stores. They operate under nearly two dozen banners, all of which share the same belief in building strong local ties and brand loyalty with their customers." As of 2015, since data is not finished collecting for 2016, they have 2778 Supermarkets and are available in 35 states.Meanwhile Walmart: "What started small, with a single discount store and the simple idea of selling more for less, has grown over the last 50 years into the largest retailer in the world. Today, nearly 260 million customers visit our more than 11,500 stores under 63 banners in28 countries and e-commerce sites in 11 countries each week. With the fiscal year 2016 revenue of $482.1 billion, Walmart employs 2.3 million associates worldwide – 1.5 million in the U.S. alone. It's all part of our unwavering commitment to creating opportunities and bringing value to customers and communities around the world." Current RatioCurrent ratio lets us know if a company can pay off their current liabilities. It is measuredby taking their current assets, and dividing by the current liabilities which will provide the current ratio.Kroger Corp.Total CurrentAssetsTotal CurrentLiabili±esCurrent Ra±o(inmillions)2016$9,892.00 $12,971.00 0.762624322015$8,911.00 $11,392.00 0.78221559