Calculate the 2 year annuity factor if the required rate of return is 10 . quizlet

$1,323.13
We need the FV of $1000 at 2.8% per year with continuous compounding. We know that continuous compounding would yield a greater FV than the FV with daily compounding.
Using the e^x function on the BA II Plus: .028 10, hit enter then 2nd and LN (you should now have 1.3231), now, 1000 = 1,323.13
Alternatively, approximate by assuming daily compounding: N = 10*365 (total number of compounding periods), I/Y = 2.8/365 , PV = -1000, PMT = 0, compute FV - 1323.12
Pretty darn close, and maybe a lot easier

$2,500.00
The first thing we know is that the mortgage has monthly payments. During the first month, the full amount of the amount borrowed is accruing interest. The annual rate is 8% which means the monthly rate is 8%/12 or 0.66667% (I'm rounding to 5 places here for simplicity).
At the end of the first month, the amount of interest due is 0.66667% of $375,000, which is:
375,000 * 0.0066667 = $2,500
The total monthly payment (which will never change, just the split between amounts going towards interest and principal) will be $$2,751.62 (N = 30*12, I/Y = 8/12, PV = -375,000, FV = 0, solve for PV)

$51,630
Use the cash flow register, be sure to clear values first (CF, 2nd, CE|C)CF0 = 0CF1 = 5,000 F01 = 1CF2 = 15,000 F02= 1CF3 = 45,000 F01 = 1CF4 = 5,000 F01 = 1Hit the NPV key, enter 12 for I arrow down, and when you see "NPV =" hit the CPT button to compute

Other sets by this creator

Recommended textbook solutions

Century 21 Accounting: General Journal

11th EditionClaudia Bienias Gilbertson, Debra Gentene, Mark W Lehman

1,012 solutions

Intermediate Accounting

14th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

1,471 solutions

Financial Accounting

4th EditionDon Herrmann, J. David Spiceland, Wayne Thomas

1,097 solutions

Accounting: What the Numbers Mean

9th EditionDaniel F Viele, David H Marshall, Wayne W McManus

345 solutions

Recommended textbook solutions

Essentials of Investments

9th EditionAlan J. Marcus, Alex Kane, Zvi Bodie

689 solutions

Accounting: What the Numbers Mean

9th EditionDaniel F Viele, David H Marshall, Wayne W McManus

345 solutions

Intermediate Accounting

14th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

1,471 solutions

Financial Accounting

4th EditionDon Herrmann, J. David Spiceland, Wayne Thomas

1,097 solutions

Recommended textbook solutions

Intermediate Accounting

14th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

1,471 solutions

Fundamentals of Financial Management, Concise Edition

10th EditionEugene F. Brigham, Joel Houston

777 solutions

Accounting: What the Numbers Mean

9th EditionDaniel F Viele, David H Marshall, Wayne W McManus

345 solutions

Financial Accounting

4th EditionDon Herrmann, J. David Spiceland, Wayne Thomas

1,097 solutions