I need 1, 2 5 and 6 answered

INFO 630- Assignment 4

Due Date: See syllabus

1. [5 Points]

Give at least three examples (other than those that have been discussed in the textbook or in class) of where the decision making process described in Chapter 4 of the text could be used at different levels in a software organization.

2. [5 Points]

Identify one of the situations from you answer to Question 1 and identify at least three decision criteria that would be relevant in making that decision.

3. [5 Points]

MegaCorp is lending $150,000 to a neighboring business. The loan is for 5 years at 8% simple interest. Assuming the neighboring business repays the entire loan in a single payment at the end of the 5 years, how much money should MegaCorp expect to receive at that time?

I = $150,000 * 5 years * 0.08 = $60,000, F = P + I = $150,000 + $60,000 = $210,000

4. [20 Points]

Use the same situation from the previous question (MegaCorp), however this time use compound interest.

a) Draw the cash flow diagram for this situation.

b) Name the proper compound interest formula to apply to this problem.

Single-payment compount-amount

c) How much should MegaCorp expect to receive?

F = P(1+i)^n

F = $150,000 (F/P,8%,5)

F = $150,000(1+0.08)^5 = $220,399

d) Is this amount the less than, the same as, or greater than the amount expected with simple interest? Why?

It’s $10,399 more than the simple interest amount because of the effect of the compounding of interest owed in the earlier interest periods.

e) Using the same format as Table 5-3, show the step-by-step calculation of the expected amount. Don’t worry about rounding errors, as long as you answer here is within $5000 of your answer in c), it will be considered close enough.

Year	Amount Owed MegaCorp at The Start of That Year	Amount of Interest MegaCorp Earns That Year	Amount of Interest	Compound Amount Owed MegaCorp at End of That Year
1	$150,000	$150,000*.08=$12,000	$12,000.00	$162,000.00
2	$162,000.00	$162,000*.08=$12,960	$12,960.00	$174,960.00
3	$174,960.00	$174,960*.08=$13,996.80	$13,996.80	$188,956.80
4	$188,956.80	$188,956.80*.08=$15,116.54	$15,116.54	$204,073.34
5	$204,073.34	$204,073.34*.08=$16,325.87	$16,325.87	$220,399.21

5. [10 Points]

Answer Self-study Question #4 in Chapter 5.

6. [10 Points]

Answer Self-study Question #6 in Chapter 5.

7. [5 Points]

Answer Self-study Questions #2, #4, and #6 in Chapter 6.

a. (2) What is the effective annual interest rate when the nominal annural interest rate is 13% compounded quarterly?

i = (1 + 0.13/4)^4 – 1 = 0.1365 = 13.648%

b. (4) What is the nominal annual interest rate when the effective annual interest rate is 13% compunded quarterly?

r = 4((sqrt4(1+0.13)-1)) = 0.1241 = 12.41%

c. (6) What is the actual rate per quarter when the nominal interest rate is 8.5% annually compounded monthly?

i = (1+ ((0.085/12)^4))-1 = 0.08186= 8.186%/4 or 2.0465%

8. [20 Points]

Answer Self-study Question #22 in Chapter 6.

Contruct a loan amortization table, similar to the one shown in Table 6-2, showing the principal and interest seperated for the first 6 months of FunSoft’s loan.

9. [10 Points]

Answer Self-study Question #23 in Chapter 6.

If FunSoft did pay the additional $250 with every payment, how much earlier would their loan be paid off?

If they paid 250 $ extra then there loan would be repaid in 134 months which is 46 months earlier than due.

10. [10 Points]

Answer Self-study Question #24 in Chapter 6.

If FunSoft did pay the additional $250 with every payment, how much would their final payment be?

The final payment would be 217.09 $

House Price1,47,500

Downpayment %0.00%

Original Principal1,47,500

Number of Payments180

Annual Interest Rate9.30%

Payment$1,522.48

Amortization Schedule

PeriodPmtIntPrinExtra PrinBalance

01,47,500.00$

11,522.48$ 1,143.13$ 379.36$ -$ 1,47,120.64$

21,522.48$ 1,140.18$ 382.30$ -$ 1,46,738.35$

31,522.48$ 1,137.22$ 385.26$ -$ 1,46,353.09$

41,522.48$ 1,134.24$ 388.24$ 1,45,964.85$

51,522.48$ 1,131.23$ 391.25$ -$ 1,45,573.59$

61,522.48$ 1,128.20$ 394.29$ -$ 1,45,179.31$