《专业英语（理财学）》配套教学课件.ppt

4.* Sign convention matters!!! 5 I/Y 2000 PV -734.42 PMT CPT N = 3 years 4.* Q1: 5(12) = 60 N; .75 I/Y; 5000 PMT; CPT PV = -240,867 PV = 5000(1 – 1 / 1.007560) / .0075 = 240,867 Q2: -200,000 PV; 60 N; 5000 PMT; CPT I/Y = 1.439% Trial and error without calculator Q3: -200,000 PV; .75 I/Y; 5000 PMT; CPT N = 47.73 (47 months plus partial payment in month 48) 200,000 = 5000(1 – 1 / 1.0075t) / .0075 .3 = 1 – 1/1.0075t 1.0075t = 1.428571429 t = ln(1.428571429) / ln(1.0075) = 47.73 months Q4: -200,000 PV; 60 N; .75 I/Y; CPT PMT = 4151.67 200,000 = C(1 – 1/1.007560) / .0075 C = 4151.67 4.* FV = 2000(1.07540 – 1)/.075 = 454,513.04 Remember the sign convention!!! 40 N 7.5 I/Y -2000 PMT CPT FV = 454,513.04 4.* This is a good preview to the valuation issues discussed in future chapters. The price of an investment is just the present value of expected future cash flows. Example statement: Suppose the Fellini Co. wants to sell preferred stock at $100 per share. A very similar issue of preferred stock already outstanding has a price of $40 per share and offers a dividend of $1 every quarter. What dividend will Fellini have to offer if the preferred stock is going to sell. 4.* Q1: 35(12) = 420 N; 1,000,000 FV; 1 I/Y; CPT PMT = 155.50 1,000,000 = C (1.01420 – 1) / .01 C = 155.50 Q2: Set calculator to annuity due and use the same inputs as above. CPT PMT = 153.96 1,000,000 = C[(1.01420 – 1) / .01] ( 1.01) C = 153.96 Q3: PV = 1.50 / .03 = $50 4.* Remind students that the value of an investment is the present value of expected future cash flows. 1 N; 10,000 FV; 7 I/Y; CPT PV = -9345.79 4.* 4 N 8 I/Y 5000 PV CPT PMT = -1509.60 4.* The reason that the loan balance does not decline to exactly zero is because of the rounding of the interest payments. Technically, the last payment would be 1509.61 so that the loan balance would be zero after the last payment. This is a common issue. * This formalizes the calculations we have been doing. * Remember the sign convent