Your parents will relire in 18 years They currently have BD 250,000 and they thi
ID: 2724004 • Letter: Y
Question
Your parents will relire in 18 years They currently have BD 250,000 and they think they will need BD 1.000.000 at retirement What annual interest rate must they earn to reach their goal? Jenabrya Corporation's 2015 sales were BD 12 million Its 2010 sales were BD 6 million what rate have sales been growing? A. financial analyst stated "Sales doubled in 5 years This represents a growth of 100% in 5 years, dividing 100% by 5. we find the growth rate to be 20% per year " Is this statement correct? Explain. Sunitha wants to buy a sports car and a local bank will lend her BD 20,000 The loan will be amortized over 5 years and the nominal interest rate is 12%, with interest paid monthly. What will be the monthly loan payment? What will be the loan's effective annual rate (EAR)? What are the interest rate assumptions built into each of the NPV, IRR and MIRR methods? Explain. Project S costs BD 15.000 and its expected cash flows are BD 4.500 pet year for five years Mutually exclusive project L costs BD 37.500 and its expected cash flows are BD 11.100 per year for 5 years. If both projects have a discount rate of 14%. which project would you recommend? ExplainExplanation / Answer
7. Future Value = Present Vaue (1+r)^n
r = to be calculated
Future Value = $1000000
Present Value = $250000
1000000 = 250000 (1+r)^18
(1+r)^18 = 4
1 + r = 4^(1/8)
r = 1.08005 - 1
= = .08005 or 8.005%
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