Name សុធី សុរ័ក្ខបញ្ញា Midterm

Group Buss. E2 Mathematics Financial

ID: B20231179

1.
➢ Calculate the total cost of potatoes purchased:

James purchased 800 pounds of potatoes at $0.18 per pound.

Total cost 800 pounds × $0.18/pound $144

➢ . Determine the anticipated spoilage:

James anticipates a spoilage rate of 20%. This means he expects 20% of the potatoes to spoil.

Spoiled potatoes 800 pounds × 20% 160 pounds

➢ . Calculate the usable amount of potatoes:

After accounting for spoilage, the usable amount of potatoes will be:

Usable potatoes = 800 pounds 160 pounds = 640 pounds

➢ . Determine the desired profit margin:

James wants to make a profit of 140% of the cost.

Profit 140% x $1441.4 x $144 $201.60

➢ . Calculate the total amount James needs to recover (including profit):

The total amount James needs to recover is the total cost plus the desired profit.

Total amount needed $144+$201.60 = $345.60

➢ . Calculate the selling price per pound:

Finally, divide the total amount needed by the usable pounds of potatoes.

Selling price per pound = $345.60 640 pounds ≈$0.54

Therefore, James McDonnell must sell the potatoes for approximately $0.54 per pound to achieve
his desired profit margin after accounting for anticipated spoilage.
2.1. Initial Price:
The initial price of the item is $18.

2. First Markup of 20%:

• Markup increases the price by 20%.

New Price 18+ (18 x 0.20) = 18+3.6=$21.60

3. First Markdown of 33%:

Markdown decreases the price by 33%.

New Price = 21.60- (21.60 × 0.33) = 21.607.128 = $14.472

4. Second Markup of 10%:

• Markup increases the price by 10%.

New Price 14.472+ (14.472 × 0.10) = 14.472+1.4472 $15.9192

5. Second Markdown of 50% (Clearance):

Markdown decreases the price by 50%.

Final Price 15.9192 (15.9192 × 0.50) = 15.91927.9596 = $7.9596

So, the final price of the item after all the markups and markdowns is $7.96 (rounded to
two decimal places).

3.1. Present Value of the $5,000 payment in 1 year:

The present value (PV) of a payment is calculated using the formula: Future Value (1+r)"
PV

where:

Future Value = 5000

r = 0.06 (6% interest rate)

n = 1 1 year)

PV_{1} = 5000/((1 + 0.06) ^ 1) = 5000/1.06 \approx 4716.98

2. Present Value of the $8,000 payment in 2 years:

PV_{2} = 8000/((1 + 0.06) ^ 2) = 8000/1.1236 \approx 7120.6

3. Present Value of the $8,000 payment in 3 years:

PV_{3} = 8000/((1 + 0.06) ^ 3) = 8000/1.191 \approx 6718.51

4. Present Value of the $8,000 payment in 4 years:

PV_{4} = 8000/((1 + 0.06) ^ 4) = 8000/1.2625 \approx 6338.21

Total Present Value:

Add up the present values of all the payments: PV total = PV_{1} + P*V_{2} + PV_{3}
+ PV_{4} \approx 4716.98 + 7120.6 + 6718.51 + 6338.21 = 24894 So, you can borrow
approximately $24,894.30 from Uncle Henry.

4. we use the formula for compound interest:

A = P * (1 + r / n) ^ (nt)

Where:

A is the amount of money accumulated after n years, including interest.

P is the principal amount (the initial amount of money).

r is the annual interest rate (decimal).

n is the number of times that interest is compounded per year.

t is the time the money is invested or borrowed for, in years.

For this problem:

P = 20000

r = 0.08

n = 1 (since the problem states compound interest but doesn't specify frequency, we
assume it compounds annually)

t = 15
Plugging in the values:

A = 20,000 x (1+0.08/1)1×15 A = 20000 * (1.08) ^ 15

Now, let's calculate the final amount.

After 15 years, with an 8% compound interest rate, your investment of $20,000 will grow
to approximately $63,443.38.

5.1. Days in each month for a non-leap year:

January: 31 days

February: 28 days

March: 31 days

• April: 30 days

May: 31 days

June: 30 days

July: 31 days

August: 31 days

September: 30 days

October: 31 days

November: 30 days

December: 31 days

. (a) March 24 to July 22:

Days remaining in March: 31- 24 = 7 days

Full months: April (30 days), May (31 days), June (30 days)

Days in July: 22 days

Total: 7+30+31+30+22 = 120 days
3. (b) April 4 to October 10:

Days remaining in April: 30-4 = 26 days

Full months: May (31 days), June (30 days), July (31 days), August (31 days), September
(30 days)

Days in October: 10 days

Total: 26+31+30+31+31+30+10 189 days

4. (c) November 8 to February 17 of the following year:

Days remaining in November: 30822 days

Full months: December (31 days), January (31 days)

Days in February: 17 days

Total: 22+31+31+17 101 days

5. (d) December 2 to January 17 of the following year:

Days remaining in December: 31-2 29 days

Days in January: 17 days

Total: 29+17 = 46 days

Summary:

(a) March 24 to July 22: 120 days

• (b) April 4 to October 10: 189 days

• (c) November 8 to February 17 of the following year: 101 days

(d) December 2 to January 17 of the following year: 46 days

6. Simple Interest Formula:
Interest(I) = P r t

where:
P is the principal amount ($2,000,000),

r is the annual interest rate (9% or 0.09),

t is the time the money is borrowed for, in years. Since the loan is for 9 months,
9
t = = 0.75years.
12

(a) Calculate the Interest:

I 2,000,000 × 0.09 × 0.75

(b) Calculate the Maturity Value:

The maturity value is the total amount to be paid back, which is the principal plus the
interest. Maturity Value = P + I

Let's calculate both the interest and the maturity value.

(a) The interest on the loan is $135,000.

(b) The maturity value, which is the total amount to be paid back, is $2,135,000.
7. 1. Determine the remaining time until the note matures:
• The note has a term of 200 days.

• The note is dated March 24, and Blues Recording sells it to the bank on August 15.

2. Calculate the time elapsed from March 24 to August 15:

March 24 to March 31: 7 days

• April: 30 days

• May: 31 days

• June: 30 days

• July: 31 days

• August 1 to August 15: 15 days

• Total elapsed time: 7+30+31+30+31+ 15 = 144 days

3. Calculate the remaining time on the note: Remaining time = 200144 = 56 days
4. Determine the bank discount amount:

The bank discount is calculated using the formula: Bank Discount = Face Value x
Discount Rate x Remaining Time / Days in a Year.

For this problem:

Bank Discount = 48,000 × 0.125 x 56 360

(Note: 360 days is often used in financial calculations as the standard year length.)

5. Calculate the proceeds:

The proceeds to the recording studio are calculated by subtracting the bank discount from
the face value of the note:

Proceeds = Face Value - Bank Discount

Let's calculate these values.

Summary of Results:

The bank discount is approximately $933.33.

The proceeds to Blues Recording after selling the note to the bank are approximately
$47,066.67.
8. Let's assume you want to borrow $10,000 for one year.
Option 1: Simple Interest Note at 11%

Principal (P): $10,000

Interest Rate (r): 11% (0.11)

Time (t): 1 year

The interest you would pay: Interest P r t =10,000 x 0.11 x 1 = 1,100

The total amount you would repay at the end of the loan term:

Maturity Value = P + Interest 10,000+1, 100 = 11, 100

Option 2: Simple Discount Note at 11%

Face Value (F): $10,000 (this is the amount you need to repay)
Discount Rate (d): 11% (0.11)

Time (t): 1 year

The discount applied:

Discount F d t=10,000 x 0.11 x 1 = 1,100

The amount you receive from the loan (proceeds): Proceeds F-Discount 10,000-1,100 =
8,900

However, you still need to repay the full face value of $10,000 at the end of the loan
term.

Comparison:

Simple Interest Note: You receive $10,000 upfront and repay $11,100 at the end of the
year. The cost of borrowing is $1,100.

Simple Discount Note: You receive $8,900 upfront (due to the $1,100 discount), but you
still have to repay the full $10,000 at the end of the year. The effective cost of borrowing
is the same $1,100, but you're starting with less money.

Conclusion:

As a borrower, you would generally prefer the simple interest note. This is because you
receive the full $10,000 upfront and have more funds available immediately, even though
the total cost is the same. With a simple discount note, you're effectively paying interest
upfront, reducing the amount of money you have available to use, while still owing the
full amount at the end.