Interest

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  1. Thank you. OT the lectures helped me a lot it was my second sitting for F2. Today I passed my computer based exam.

  2. Hi there,

    Can you please explain this question?
    Hi there,

    Can you please explain this question taken from June 2012 exam paper?

    An investor has the choice between two investments. Investment Exe offers interest of 4% per year compounded semi-annually for a period of three years. Investment Wye offers one interest payment of 20% at the end of its four-year life.
    What is the annual effective interest rate offered by the two investments?
    Investment Exe Investment Wye
    A 4·00%n 4·66%
    B 4·00% 5·00%
    C 4·04% 4·66%
    D 4·04% 5·00%

    The correct answer is C.
    Thanks.

  3. Hi there,

    Can you please explain this question taken from June 2012 paper?

    An investment centre earns a return on investment of 18% and a residual income of $300,000. The cost of capital is 15%. A new project offers a return on capital employed of 17%. If the new project were adopted, what would happen to the investment centre’s return on investment and residual income?

    Return on investment Residual income
    A increase decrease
    B increase increase
    C decrease decrease
    D decrease increase

    The correct answer is D.

    Thanks.

  4. iiiieeeeeeeLLLLLLLLLLLLLLLLLLLLLLL !!!!!!!!!!!!!!!!!!!!!!!!!!! hahahahaha
    really good lecture

  5. Thanks a million again :-)

  6. the way he says ‘AGHHHH SHIT’ :p

  7. very good, and regarding multiply 100*(1.02) twelve time by calculator is easy, but any body let me know how can i give the formulla in excel sheet to do the same?

  8. the last question wasn’t half yearly….he said every two months, I dn’t think I grasp that last ques.

  9. oh okay for a year sorry.

  10. why is the 1.03 to the power 6 and not 2 in the last example? because you said every 2 months.

  11. I don’t understand the logic with APR.

  12. very good notes and thanks.

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