FIN 419 Week 3 Individual Assignment Assignments from the Readings

This document of FIN 419 Week 3 Individual Assignment Assignments from the Readings shows the solutions to the following problems:

Chapter 2: Problem 2.1

Briefly discuss the form and informational content of each of these statements.

Chapter 2: Problem 2.2

Chapter 4: Problem 4.23

Chapter 4: Problem 4.32

a. How large must the single deposit today into an account paying 8% annual interest be to provide for full coverage of the anticipated budget shortfalls?

b. What effect would an increase in your earnings rate have on the amount calculated in part a? Explain.

Chapter 4: Problem 4.46

a. Calculate the annual, end-of-year loan payment.

b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments.

c. Explain why the interest portion of each payment declines with the passage of time.

Chapter 4: Problem 4.48

a. Assuming that Tim accepts the dealer’s offer, what will his monthly (end- of month) payment amount be?

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.