© All Rights Reserved

Als DOCX, PDF, TXT **herunterladen** oder online auf Scribd lesen

170 Aufrufe

© All Rights Reserved

Als DOCX, PDF, TXT **herunterladen** oder online auf Scribd lesen

- Present Value
- Lottery Case Study
- Time Value of Money Chapter 5 Practice Problems 1 - Answers
- FIN 580 - Midterm
- financial management
- QF2101 1112S1 Assignment 1 Questions
- Accounting 13
- Time Value of Money
- TIBAIIPlus (1)
- Chapter 5 - Time Value of Money
- Time Value of Time Value of Money
- Spring Budget Newsletter Mar 2010 Issue CP3
- Using Interest Factor Tables
- MS Excel 2007 Advanced
- Agric Calculations
- Bab 4
- Finance Equation Sheet Part 2
- p1
- 3 Time Value of Money.ppt
- Lecture-Notes-Mid1.pdf

Sie sind auf Seite 1von 20

Name_____________ Date________

1. Get a piece of 8.5 inch by 11 inch paper. Get a pen or pencil.

2. Write 6% per year = 0.06 as large as possible on the paper.

3. Fold the paper in half.

4. What time period, or interval of time, does each half

represent?

5. Write the interest rate per half interval in decimal form. [Hint:

half of 6%?]

6. Fold the paper to represent 12 monthly time intervals.

7. Write the interest rate per month in each interval.

8. Start with $1000. Add the interval interest rate to get the total

with interest for each month 1 to 12 using compounding interest.

What is the future amount of investing $1000 for 6 monthly

intervals, in an account paying 6% per year, compounded

monthly?

9. Demonstrate how to model a 2-year investment?

investment.

Goal: Find the future total value of $1000 regularly

deposited at the end of each year, into an account

paying 10%/a, compounded monthly for 3 years.

Regular payment: $500 at the end of each year;

Interest 12%/year, compounded yearly;

Number of payments (N): 3

Personal Finance.

Please be aware of the following resources available to you after this course is finished.

Write down these web addresses at home. Post them on your fridge for future

reference!

Additional Financial Tools are available at:

Financial Consumer Agency of Canada.

Website: www.fcac.gc.ca

Canadian Mortgage and Housing Association.

Website: www.cmhc.ca

Tools

Formulas

Compound Interest Formula:

A = P(1 + i)n

FV = Pmt[(1+i)n -1]/i

PV = Pmt[1-(1+i)-n]/i

Where lowercase i represents the compound interval interest rate.

Financial institutions state the annual interest rate, but we often need the semi-annual

interest rate (annual rate as a decimal / 2) or the monthly interest rate (annual rate as

a decimal/12).

Did you know?

On our calendar, a leap year occurs when the year is evenly divisible by four,

except when the year value is divisible by 400;

Memory aid: The song lyrics Thirty days hath September; April; June; and

November. All the rest have thirty one. Except for February, which has 28, unless

its a leap year when it has 29.

Memory aid: Knuckles on your fists also provide a way to remember whether or

not a month has 30 days or 31 days. Make two fists and count the knuckle and

troughs between the knuckles. Knuckles have 31 days. Troughs between

knuckles have fewer days. Do not count the space between your fists as a

trough. It memory aid works. Try it!

Answer all questions. Use additional paper as required and attach them to this report.

You may have to complete some of this work on your own time, using computers,

and/or the internet.

1. How many months in each time period?

Years

5 years

10 years

20 years

25 year

30 years

[2 marks]

Months

[2 marks]

Number of Weeks

2 years

5 years

20 years

30 years

3. Depositing $100 per month means depositing how much in each time period? [2

marks]

Amount ($)

5 years

10 years

20 years

25 year

30 years

4. Earning $40 000 in one year means earning an average of how much in each time

period? [3 marks]

Time

Period

a month

one week

one day

six and a

half

months

three

months

Amount ($)

5. How many payments are made in one year for each payment frequency? [3 marks]

Frequency Number of

payments per

year.

Monthly

quarterly

semiannually

Weekly

bi-weekly

semimonthly

[3 marks]

c) The year that will you turn age 65 is______. Is it a leap year? How do you

know?

[3 marks]

a) 1000(1.0325)1

=

b) 1000(1.0325)60

=

c) 1000(1.0325)-60

8. a) State the compound interest formula in terms of A, P, i, and n. ______________

b) Rewrite the compound interest formula A=P(1+i)n in terms of FV, PV, i, and n.

[2 marks]

9. True or False? Multiplying a value by one will result in a larger value. Give an

example. [1 mark]

10. True or False? Multiplying any positive number by a number greater than one will

result in a larger value. [1 mark]

11. True or False? Multiplying any positive value by a number between zero and one

will result in a larger value. [1 mark]

12. True or False? The number 0.804 is greater than the number 0.84. [1 mark]

13. True or False? The number 1 + an increase of 5% is greater than one. [1 mark]

14. True or False? A 5% decrease in value can be found by multiplying the initial value

by 0.95. [1 mark]

15. True or False. A 5% increase in value can be found by multiplying the initial value

by 1.05. [1 mark]

16. True or False. Another way of saying per year is per annum. [1 mark]

17. True or False. Another way of writing per annum is /a. For example, 6%/a. [1

mark]

18. True or False. A series of payments or deposits paid at regular intervals is called an

annuity. [1 mark]

19. True of False. Understanding math improves the likelihood of making good

financial decisions. Justify the statement. [1 mark]

20. True or False. The interest rate per compounding interval is often represented as

the variable i.

[1 mark]

21. True or False. The compound interest formula A=P(1+i)n can also be written as the

future value formula FV = PV(1+i)n. [1 mark]

22. How is an annuity different from a one-time investment? Show the difference

visually using time lines. [2 marks]

23. Show step-by-step how the future value formula, FV = PV(1+i)n, can be rearranged

to give us the present value formula PV = FV(1+i)-n.

[2 marks]

24. How many semi-monthly payments will be made if payments are made for a period

of one year? Explain your reasoning. [1 mark]

25. How many bi-weekly payments will be made if payments are made for a period of

one year? Explain your reasoning. [1 mark]

26. Solve 8000 = 1.005n. Do not round. Hint: Use log button. [2 marks]

28. Solve 7000 = (1+i)60. Do not round. Show all steps. [2 marks]

. [1 mark]

31. Show the calculations. A person buys a home for $300 000 on June 1st, 2016. The

home value increases 3% each year. What is the value of the home at each of these

times in the future? :

a) June 2017?

b) June 2018?

c) June 2026?

marks]

[3

32. What is meant by home equity? Give a numeric example to support your

explanation. [2 marks]

33. You are buying a $300 000 property and make a down payment of 5% of its value.

[5 marks]

a) Show how to calculate the amount of the down payment.

b) Show how to calculate the amount of money needed for the mortgage.

c) How much equity would you have in the property on the date purchased?

d) Assume the property increase in value by 2.5% yearly, calculate the value of

the property each year for the next 5 years. Use a data table with appropriate column

titles to display the information.

34. Determine the future value of a single investment of $1000 at 4% per year,

compounded annually, for 45 years. [5 marks]

35. Draw a time line diagram to represent an annuity situation where $200 per month

is invested into an account for six months, at an annual interest rate of 4%. Calculate

the future value of the annuity. [5 marks]

36. Research, gather and interpret information about common real-life annuities such

as RRSPs, RESPs, and RRIFs, describe the key features of an annuity. [6 marks]

Annuity

RRSP

Key Purpose/Features

What does this mean?

How does it work?

RESP

How does it work?

RRIF

How does it work?

37. Use a TVM calculator (see teacher). In the table below, write the meaning of each

of the variables represented in the Time-Value-of-Money app:

[no marks]

N=

I%=

PV=

PMT=

FV=

P/Y=

C/Y=

PMT:END

BEGIN

Number of payments

Annual interest rate

Present Value

Regular Payment

Future Value

Number of payments per year

Number of compounding intervals per year

<Are payments made at the end or beginning?>

38. Given an ordinary simple annuity with semi-annual deposits of $1000, earning 6%

interest per year compounded semi-annually, over a 20-year term, show which of the

following results in the greatest return by drawing the TVM app data table contents for

each situation and writing a summary conclusion:

Doubling Payment

N=

I%=

PV=

PMT=

2000

FV=

P/Y=

C/Y=

PMT:END

BEGIN

Double payments to

$2000?

Conclusion:

N=

I%=

12

PV=

PMT=

FV=

P/Y=

C/Y=

PMT:END

BEGIN

Doubling the Interest

Rate?

N=

I%=

PV=

PMT=

FV=

P/Y=

4

C/Y=

PMT:END

BEGIN

Doubling the

frequency of the

payments and also

doubling the

compounding

frequency?

N=

I%=

PV=

PMT=

FV=

P/Y=

C/Y=

PMT:END

BEGIN

Doubling the payment

amount and

compounding

frequency to four

times each year?

[20 marks]

39.

[TVM solver/Spreadsheet/Graphing Software - Solve problems using technology that involve the amount, the

present value, and the regular payment of an ordinary simple annuity.]

Task: Show how to calculate the total interest paid over the life of a $10 000 loan with

monthly repayments over 2 years at 8% per year compounded monthly, and compare

the total interest with the original principal of the loan. Does it surprise you how much

interest must be repaid? Of the total amount paid, what amount and percent is principal

and what amount and percent is interest? Draw a stacked bar graph to visually display

these percentages. [10 marks]

40. [Curriculum: Demonstrate an understanding of annuities used as long-term savings plans.]

a) What is an annuity?

(

((

)( )

)

[2 marks]

2.5%/a, compounded monthly.

[8 marks]

41. [Curriculum:

demonstrate, through investigation using technology (e.g., a TVM Solver), the advantages of

starting deposits earlier when investing in annuities used as long-term savings plans.]

Problem: If you want to have a million dollars at age 65, how much would you have to

contribute monthly into an investment that pays 6% per annum, compounded monthly,

beginning at age 20? At age 35? At age 50? Show your work. Write to explain your

reasoning. [10 marks]

Starting Age 20

Starting Age 35

Starting Age 50

42. [gather and interpret information about mortgages, describe features associated with mortgages (e.g., mortgages are

annuities for which the present value is the amount borrowed to purchase a home; the interest on a mortgage is

compounded semi-annually but often paid monthly), and compare different types of mortgages (e.g., open mortgage,

closed mortgage, variable-rate mortgage)].

Tasks: [5 marks]

a) Explain the difference between an open mortgage and a closed mortgage.

mortgage, using an example.

43. [Curriculum: Read and interpret an amortization table for a mortgage]

Task: You purchase a condominium with a $25 000 down payment, and you mortgage

the balance at 6.5% per year, compounded semi-annually, over 25 years, payable

monthly. Use an amortization table to compare the interest paid in the first year of the

mortgage with the interest paid in the 25th year. Use a 5-year term. [10 marks]

a)

b)

c)

d)

e)

f)

g)

What was the purchase price of the house?........................_______________

How often must payments be made?................................ _______________

How much money must be paid each month?................... _______________

How much principal was paid in month 1? _____ month 12?________

How much interest was paid in month 1?_____ ; month 12?________

If, one year after the date of purchase, the house increase in value 3%,

determine the change in house value, and in net worth, due to owning the

house.

[10 marks]

44. [Curriculum: Generate an amortization table for a mortgage, using a variety of tools and strategies (e.g., input data into

an online mortgage calculator; determine the payments using the TVM Solver on a graphing calculator and generate the

amortization table using a spreadsheet), calculate the total interest paid over the life of a mortgage, and compare the total

interest with the original principal of the mortgage.] Task: Use the Government of Canada online

schedule for a Canadian mortgage amount between $150 000 and $350 000 at 5%/a,

amortized for 25 years. Use a 5-year term. List the results of the amortization summary

table (show variable names and values). [10 marks]

45. [Curriculum: Making comparisons between mortgage options. Determine, through investigation using technology

(e.g., TVM Solver, online tools, or financial software), the effects of varying payment periods, regular payments, and

interest rates on the length of time needed to pay off a mortgage and on the total interest paid.]

Task: Create and print mortgage schedules using the mortgage tools available at

www.fcac.gc.ca , then use these reports to calculate the interest saved on a $100 000

Canadian (compounded semi-annually) mortgage with monthly payments, at 6% per

annum, when it is amortized over 20 years instead of 25 years. Clearly state your

findings for each. Use a 5-year term.

[10 marks]

20 year Amortization

vs.

25 year Amortization

46. . Research a town-home, or single detached hope, for sale in Durham Region. Can

a couple afford the home on a family income of $50 000 per year? $90 000 per year?

Report on your Investigation. Explain your reasoning. Provide mathematical evidence to

support your reasoning.

Online, find a home for sale in the range of $200000 to $400000;

Start a Word document file to write a report;

Determine the down payment amount at 10% of the home

price:_______________;

Determine the amount of the mortgage required:_____________________;

Determine the monthly payment required: _________________;

Write a monthly budget showing income, expenses, and balance remaining.

Include $1200 for food; monthly mortgage payment amount; utilities at

$400/mo.; phone at $80/mo; clothing at $100/mo.; entertainment at $100/mo.;

maintenance at $100/mo.; transportation at $200/mo.; plus any other items that

you care to include.

Submit a report summarizing your findings. Can this couple financial afford such

a home on their income? JUSTIFY your conclusions.

Q46. Marking Rubric

Level 1

(50-59) 5

Level 2

(60-69)

Ability to comprehend the

situation and find

information.

Little

evidence

provided.

Substantial

ly below

standard

expected.

Little, or

incorrect,

mathemati

cal

reasoning

is evident.

Some

evidence

provide, but

lacks detail.

Little or no

written

statements

or

evidence

to support

the

Application of

mathematical reasoning.

(Down payment issues

addressed.)

(Payment schedule

showing monthly principal,

interest, and balance owing

is included).

(Other monthly financial

issues addressed food,

etc.)

Communication:

(Report is clearly written

and effectively

communicated with proper

spelling

, punctuation, and

grammar; Report includes:

Level 3

(70-79)

7

[Meets

Provincial

Standard]

Sufficient

inquiry

evidence

provided.

Level 4

(80 100)

10

Some

mathematical

reasoning is

evident;

Reasoning

may contain

some small

or nonsignificant

errors.

Good

mathematic

al

reasoning

clearly

evident.

Thorough

mathematical

reasoning is evident

and referenced in the

report.

Some written

statements to

support or

evidence to

support the

financial

argument.

Substantial

written

statements

or evidence

to support

the

financial

Thorough written

statements and

evidence clearly

support the financial

argument.

Thoroughly

researched and

documented. Student

clearly understands

the scope of the

assignment.

a photo of the home for

sale ad; an fcac.gc.ca

mortgage payment

schedule; a viable 12month budget; and a

written explanation and

summary.

Total (out of 30)

financial

argument.

argument.

- Present ValueHochgeladen vonparshu0087072
- Lottery Case StudyHochgeladen vonSwapnil Kulkarni
- Time Value of Money Chapter 5 Practice Problems 1 - AnswersHochgeladen vonEuromina Thevenin
- FIN 580 - MidtermHochgeladen vonumair098
- financial managementHochgeladen vonVinisha James
- QF2101 1112S1 Assignment 1 QuestionsHochgeladen vonRaid Tan
- Accounting 13Hochgeladen vonwcat
- Time Value of MoneyHochgeladen vonYasir Hussain
- TIBAIIPlus (1)Hochgeladen vonLow Linhui
- Chapter 5 - Time Value of MoneyHochgeladen vonAstarina Mareta Sari
- Time Value of Time Value of MoneyHochgeladen vonmomindkhan
- Spring Budget Newsletter Mar 2010 Issue CP3Hochgeladen vongmiguk
- Using Interest Factor TablesHochgeladen vonantibayut
- MS Excel 2007 AdvancedHochgeladen vonbaap21
- Agric CalculationsHochgeladen vonPortia Shilenge
- Bab 4Hochgeladen vonSaravanan Mathi
- Finance Equation Sheet Part 2Hochgeladen vonTappei Love
- p1Hochgeladen vonKenneth Bryan Tegio
- 3 Time Value of Money.pptHochgeladen vonAlex Xlea
- Lecture-Notes-Mid1.pdfHochgeladen vonDeepak Rathore
- 181014125-ecoon-pdf.pdfHochgeladen vonFritz Fatiga
- Discounted Cash Flow Valuation Techniques by Tanvir Mohammad Hayder ArifHochgeladen vonআনীক অবকাশ
- KEQ FV and PV TablesHochgeladen vonRaj Shravanthi
- bmm-9e-sm-ch-05-final.pdfHochgeladen vonHətəm Bağırlı
- TimeValue.docHochgeladen vonChabelita Santillan
- E13Hochgeladen vonMarche Sebastian
- Question 1Hochgeladen vonKshitij Negi
- TimeValue.docHochgeladen vonmohanraokp2279
- BD4 SM05 FinalHochgeladen vonClaudia Poclaba
- The-Time-value-of-money.pptxHochgeladen vonAirra Joyce Tibay

- 3m 4 4 the sine lawHochgeladen vonapi-268810190
- 4 2 trig finding anglesHochgeladen vonapi-268810190
- 3m ch2solutions pck1Hochgeladen vonapi-268810190
- lesson status quadratic expectationsHochgeladen vonapi-268810190
- exam map4c1 formulas and conversions reference sheetHochgeladen vonapi-268810190
- skills 4 solutionsHochgeladen vonapi-268810190
- class 8 composite volume and optimal area - chapter 2 geometryHochgeladen vonapi-268810190
- skills2 solutionsHochgeladen vonapi-268810190
- diagnostic geometryHochgeladen vonapi-268810190
- skills1 solutions0001Hochgeladen vonapi-268810190
- imperial length conversionsHochgeladen vonapi-268810190
- pyth theoremHochgeladen vonapi-268810190
- cross multiplicationHochgeladen vonapi-268810190
- skills 1Hochgeladen vonapi-268810190
- trig questions nsHochgeladen vonapi-268810190
- trigonometryHochgeladen vonapi-268810190
- c3asmt geometry canadian flagHochgeladen vonapi-268810190
- essential concepts in geometryHochgeladen vonapi-268810190
- about this course map4c assessment emotional strategies and prior knowledgeHochgeladen vonapi-268810190
- annuities part 1 answers q1-27 mortgages and personal finance nsHochgeladen vonapi-268810190
- annuities part 4 answers q44-46 mortgages and personal finance nsHochgeladen vonapi-268810190
- annuities part 3 answers q40-43 mortgages and personal finance nsHochgeladen vonapi-268810190
- annuities part 2 answers q28-39 mortgages and personal finance nsHochgeladen vonapi-268810190
- exam preparation map4cHochgeladen vonapi-268810190
- annuities part 2 answers q28-39 mortgages and personal finance nsHochgeladen vonapi-268810190
- annuities part 2 q28-39 mortgages and personal finance nsHochgeladen vonapi-268810190
- annuities part 4 q44-46 mortgages and personal finance nsHochgeladen vonapi-268810190
- annuities part 3 q40-43 mortgages and personal finance nsHochgeladen vonapi-268810190
- map4c skills 7Hochgeladen vonapi-268810190

- Lp Mathematics Q2 Week 3Hochgeladen vonMCDABC
- Orifice MeterHochgeladen vonEran Lopez
- The Astronomical Code of the R. gvedaHochgeladen vonrodenderon
- Alami Svrcek Monnery Water Content Paper Rev 3.3Hochgeladen vonWayne Monnery
- Scientific Pitch Notation - Wikipedia, The Free EncyclopediaHochgeladen vonCarmen Leong
- LCD Interfacing With MicrocontrollersHochgeladen vontrinhdieuhvktqs
- Khalil Wen untuk kitaHochgeladen vonKhalil KW
- American Machinists Handbook 1000165626Hochgeladen vonJuan Pedreno Bernal
- US Federal Trade Commission: 061206marion muehlegger presentationHochgeladen vonftc
- Kp Horary FinalHochgeladen vonSantanu Halder
- A Novel Cluster-based Energy Efficient Routing InHochgeladen vonmani
- Applications of ProbabilityHochgeladen vonC Vaibhav Kumar
- Windows Powershell 4.0 - Language Quick Reference.pdfHochgeladen vonByteCruncher
- 19222_13_dc_machines.pdfHochgeladen vonAmmar Syahid Rabbani
- Assignment 2Hochgeladen vonVictor Lightyear Chulu
- 003-HCS12 Instruction Set (1)Hochgeladen vonRamesh Sundar
- Lab 3-Pumps in Series and ParallelHochgeladen vonEkala Xuhalx
- CE404 Seepage TheoriesHochgeladen vonanuragsatyarth
- A New Look at Ars Subtilior Notation and Style in Codex Chantilly p. 74Hochgeladen vonMarco Lombardi
- Qft Scattering NotesHochgeladen vonunwanted
- Education Planner Scavenger HuntHochgeladen vonCherry
- 5 3 internal resistance of a battery labHochgeladen vonapi-296446683
- Manifestation Samples How to Write ManifestationsHochgeladen vonВладимир Ивковић
- Published CORDIC NareshHochgeladen vonmoravinenirambabu
- Exercise Ch 15Hochgeladen vonNurshuhada Nordin
- Wave Shaping CircuitsHochgeladen vonParesh Sawant
- Type of ForcesHochgeladen vonDea Sukrisna
- Lecture 12Hochgeladen vonankurkothari
- Coimisiún Na Scrúduithe Stáit State Examinations CommissionHochgeladen vonfareed7865
- 2001 an Easy Methodology for Estimating Kinetic Constants in Complex Kinetic ModelsHochgeladen vonRuben Ramirez

## Viel mehr als nur Dokumente.

Entdecken, was Scribd alles zu bieten hat, inklusive Bücher und Hörbücher von großen Verlagen.

Jederzeit kündbar.