PRINCIPLES OF FINANCIAL ACCOUNTING APPENDIX C

Simple vs Compound interest BEC1: A.5,000 x 8% x 12 = 4,800 5, ,800 = 9,800  B.Table 1, 8%, 12 years x 5,000 = 12,590.52

Annual vs semi-annual compounding BEC2 1a6%, 5 periods b.2 ½ %, 6 periods 2a.5%, 10 periods b.2%, 12 periods

Future value of $1 BEC 3 Table 1, 8 years, 6% 10,000 x = 15,938.5

Future value of annuity Annuity is a series of equal payments with equal distance between each payment. BEC4 Table 2, 10 years, 5% 60,000 x = 754,673.40

Present value of $1 BEC9 Table 3, 5 years, 12% 500,000 x = 283,715.00

Present value of an annuity BEC11 Table 4, 15 years, 6% 25,000 x = 242,806.25

Selling price of bonds BEC13 Table 3, 20 periods, 4% 100,000 x = 45,639 Table 4, 20 periods 4% 100,000 x 11% x ½ = 5, x 5,500 = 74, , , = 120,385.82

Assignment BEC-14 BEC-15 BEC-16 BEC-17