Unit 1.1 DB: Compound Interest
Define the term “compound interest.” How does
compound interest differ from “simple interest”
Unit 1.2 DB: Internet Search
Search the internet for any short article related to finance
and then post a couple of sentences here about what you’ve learned or what your
thoughts are
Unit 1.3 DB: Percent Increase and Decrease
When corporations release earnings, they often include the
prior year’s numbers a well as the current year’s. Often, the numbers are
translated into percentage terms. Therefore, it’s helpful for you to know how
to calculate percent changes quickly by estimating and rounding.
What is the percent increase for revenues which have grown
from $150 (million) last year to $200 (million) this year. Show all steps.
Unit 2.1 DB: How to use the "Rule of
72" to estimate Compound Interest
The Rule of 72 states that IF rate*time=72, your investment
will double.
Referring to the example if $1000 grows to $2000 in ten
years, you see that this is a double. Thus, rate * time=72. Plug in the 10
years for time, and the formula becomes…rate * 10 years=72. Thus, rate=7.2%!
QUESTIONS:
Using the Rule of 72, estimate how long it will take to
double your investment if you earn 6%?
If you earn 8%?
If you earn 12%?
Unit 2.2 DB: Hint for Assignment 2
Where do you put the number for “other expenses”
Unit 3.1 DB: TVM Formulas for Single Sum Calculations
To compute future value (fv) of a single sum, use Table A1
in the appendix and the formula: fv = pv * factor.
To find the present value (pv) of a known future amount, use
Table A2 in the appendix and the formula pv = fv * factor.
Question 1: You invest $3000 for 8 years and expect to earn
9%, on average, per year. What is the fv ? Solve, using Table A1.
Question 2: You want to have $6000 eight years from today to
purchase a G. Loomis fishing rod and a Van Staal fishing reel. You expect to
earn 9%, on average. How much should you invest today to reach your target in 8
years ? Solve, using Table A2.
Be sure to show the formula and your “plug-in’s, then solve.
Show all the steps in your work.
Unit 3.2 DB: TVM Formulas for Annuities
First, define the term annuity. Then, check the annuity
tables A3 and A4.
Do these annuity factors exhibit the same inverse
relationship as single sum factors?
30 25 21
Unit 3.3 DB: Rule of 72 Questions
Here is a question for you to solve using the Rule of 72.
Question: In 1967, tuition, room & board at a private college costs $3000.
In 2007, the same services cost $48,000. Find the avereage annual rate of
college-cost inflation, using the Rule of 72. Hint: first, estimate the number
of doubles. Since each double represents 72 compounding percents, you can then
find the total number of compounding percents. Finally, plug-into the formula
rate * time = total compounding percents, and solve for rate.
Unit 3.4 DB: Practice Problems for Chapter 5
Use this thread to post your solutions for Q1, Q2, and Q3 on
Page 144.
Be sure to show all the steps in your work.
25 23 20
Unit 4.1 DB: Hints for Case Problem 4
For CP4, what items can you depreciate? Are additions to
working capital depreciable?
Unit 5.1 DB: Key Cost Capital Term: Credit Facility
In this article, what is the meaning of the term
“credit facility”?
Unit 5.2 DB: Error on Slide 10
FIN201, there is an error in Slide 10. Once you’ve reviewed
the lecture, go back to Slide 10 and see if you can spot the error. Post your
comments here.
Unit 6 DB: Practice Questions for the Final Exam
Here are some practice questions designed to prepare you for
the final exam. Work together to solve these questions.
Solve the following using The Rule of 72
Unit 6 DB: Practice Questions for the Final Exam
Here are some practice questions designed to prepare you for
the final exam. Work together to solve these questions.
Solve the following using The Rule of 72.
You expect to earn 8% per year on your investment. If you
invest $3000 today, how much will your investment be worth in 9 years ?
You want to have $40,000 available to finance a trip around
the world in 12 years. You estimate that you can earn 12% on your investment.
How much do you need to deposit today to meet your goal ?
A new Grady White fishing boat cost $5000 in 1979. Today,
the very same boat costs around $40,000. Estimate the average annual inflation
rate, using the Rule of 72.
You invest $2000 today and expect ot earn 9% per year. how
many years will it take for your investment to grow to $32,000 ?
Unit 7 DB: Class Discussion
Unit 7 Class Discussion
