Compound Interest & Financial Ratios Excel
Problem 4.1 How many years will the following take? 1022 SAR to grow to 1,369.58 SAR if invested at 5 percent compounded annually. N ?? I 0.05 PV -1022 PMT 0 FV 1369.58 Problem 4.2 4.2.a. Assume that you plan to buy a vehicle in 5 years and you need to save for a down payment. You plan to save 500 SAR per year (with the first deposit made immediately), and you will deposit the funds in a bank accoun How much will you have after 5 years? N I PV PMT 5 2% $0 -$500 4.2.b. How much will you have if you make the deposits at the end of each year? N I PV PMT 5 2% $0 -$500 Problem 4.3 4.3.a Suppose a U.S. government bond promises to pay 2,249.73 SAR four years from now. If the going interest rate on 4-yea N I PMT FV 4 0.03 0 2249.73 4.3.b How would your answer change if the bond matured in 5 years rather than 4 years? N I PMT 5 0.03 0 FV 2249.73 4.3.c. What if the interest rate on the 5-year bond was 6% rather than 3%? N I PMT FV 5 0.06 0 2249.73 4.3.d. How much would 1,000,000 SAR due in 50 years be worth today if the discount rate was 5%? N I PMT FV 50 0.05 0 1000000 4.3.e If the discount rate was 20%? N I PMT FV 50 0.2 0 1000000 4.4 ABC Corporation balance sheet and income statement are provided. The finanical ratios to be completed are listed below ABC Corporation Balance Sheet December 31, 20XX As of D Assets: Cash Accounts receivable Inventories Other current assets Total current assets Gross fixed assets Accumulated depreciation Net fixed assets Total assets LIABILITIES (DEBT) AND EQUITY 250 550 750 Sales Cost of goods sold Gross profits 200 ?? Operating expenses: 2500 -1000 1500 ?? Selling and G&A expe Depreciation expense Total operating expe Operati ng income (earning s before interest and taxes) Interest expense Earnings before taxes Accounts payable Short-term notes payable 250 90 Total current liabilities ?? Long-term debt 960 Total liabilities Income taxes Net Income ?? Common stock (par & paid in capital) Retained earnings 1000 950 Total common equity Total liabilities and equity 1950 ?? Other Information Number of shares (th Dividends (thousands Market price per shar Ratios Current ratio Acid-test ratio Days in receivables Days in inventories Operating return on assets Operating profit margin Total asset turnover Fixed asset turnover Debt ratio Times interest earned Return on equity Earnings per share Dividends per share Price/Earnings Book value per share Market/Book Problem 4.5 You are making car payments of 500 SAR per month for the next 5 years, you know that your car loan has an interest rate of 8 Rate Nper FV Payment PV 0.084 60 0 -500 Periods = 5 years x 1 Problem 4.6 Suppose you have to borrow 13,000 SAR at an interest rate of 5.5% (compounded quarterly) for a period of 6 years FV Rate 5.5%/4 NPER 6*4 PMT PV 0 13,000 Problem 4.7.a Calculate the Future Value of 5,000 SAR made at the end of each year for 25 years, with an interest rate of 7%. Rate NPER PMT Type 0.07 4.7.b -5,000 25 0 Calculate the Future Value of a payment of 5,000 SAR made at the beginning of each year for 25 Rate NPER 0.07 PMT 25 Type -5000 1 funds in a bank account that pays 2% interest. ng interest rate on 4-year government bonds is 3%, how much is the bond worth today? mpleted are listed below. However, to complete the ratios the balance sheet and income statement totals should also be calculated. ABC Corporation Income Statement As of December 31, 20XX 8600 2350 ?? Operating expenses: 850 125 ?? ?? 50 ?? 300 ?? Other Information 240 175 35 has an interest rate of 8.4%, discounted monthly, what was the initial price of the car? Periods = 5 years x 12 months for a period of 6 years. What will be the loan amount you need to pay at the end of 6 years?
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