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hcm-ct-wk-3-opt-1-frmmpw1j-ujqgh3t0.xlsx

Answered Same Day Oct 12, 2021

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Sweety answered on Oct 19 2021

157 Votes

Problem 1
    9/1/14    UNDERSTANDING HEALTHCARE FINANCIAL MANAGEMENT
            Chapter 4 -- Time Value Analysis
    PROBLEM 1
    Find the following values for a lump sum:
    - The future value of $500 invested at 8 percent for one yea
    - The future value of $500 invested at 8 percent for five years
    - The present value of $500 to be received in one year when the opportunity cost rate is 8 percent
    - The present value of $500 to be received in five years when the opportunity cost rate is 8 percent
    assuming:
    a. Annual compounding
    b. Semiannual compounding
    c. Quarterly compounding
    ANSWER
        PARTICULARS    FUTURE VALUE
            AMOUNT    AMOUNT
        ANNUAL COMPOUNDING
    a    Invested For    1 year    5 yea
        Invested Amount    500    500
        Interest p.a.    8%    8%
        Future Value    540    735
        SEMIANNUAL COMPOUNDING
    b    Invested for    1 year    5 yea
        Invested Amount    500    500
        Interest p.a.    8%    8%
        Interest half yearly    4%    4%
        Future Value    540.8    740
        QUATERLY COMPOUNDING
    c    Invested for    1 year    5 yea
        Invested Amount    500    500
        Interest p.a.    8%    8%
        Interest quaterly    2%    2%
        Future Value    541.2    743
    STATEMENT SHOWING PRESENT VALUE WHEN COMPOUNDED ANNUALLY
    YEAR    DISCOUNTING
FACTOR @ 8%    INVESTED FOR 1 YEAR        INVESTED FOR 5 YEAR
            AMOUNT    PRESENT VALUE    AMOUNT    PRESENT VALUE
    1    0.9259    540.00    499.99    40.00    37.04
    2    0.8572    - 0    - 0    40.00    34.29
    3    0.7936    - 0    - 0    40.00    31.74
    4    0.7347    - 0    - 0    40.00    29.39
    5    0.6802    - 0    - 0    540.00    367.31
                499.99        499.76
    STATEMENT SHOWING PRESENT VALUE WHEN COMPOUNDED HALF YEARLY
    HALF YEAR    DISCOUNTING
FACTOR @ 4%    INVESTED FOR 1 YEAR        INVESTED FOR 5 YEAR
            AMOUNT    PRESENT VALUE    AMOUNT    PRESENT VALUE
    1    0.9615    20.00    19.23    20.00    19.23
    2    0.9244    520.00    480.69    20.00    18.49
    3    0.8888    - 0    - 0    20.00    17.78
    4    0.8545    - 0    - 0    20.00    17.09
    5    0.8216    - 0    - 0    20.00    16.43
    6    0.7899    - 0    - 0    20.00    15.80
    7    0.7594    - 0    - 0    20.00    15.19
    8    0.7301    - 0    - 0    20.00    14.60
    9    0.7019    - 0    -...

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