1.
Present ValueInterest Rate function of periodsFuture value
400,0005%5510,512.63
17,4116%3099,999.92
35,00010%20235,462.50
26,981.7516%15249,999.97
FV= PV X (1+r)^n
= 400,000 X (1 + 0.05) ^5 = 510, 512.63
= 17,411 X (1 + 0.06)^30 = 99,999.92
= 35,000 X (1 + 0.10) ^ 20= 235,462.50
= 26, 981 X (1 + 0.16)^15 = 249,999.97
12.
If 5 years = 1,000 X ( 1 + 0.08) ^5= 1,469.33
If 10 Years = 1,000 X (1 + 0.08) ^10 = 2,158.92
If 20 years = 1,000 X (1 + 0.08) ^20= 4,660.96
18.
Marthas Rate = (65.00/21.00)^1/10 1 = 1.1196-1 = 11.96%
Davids Rate = (7.30/3.00)^1/6-1 = 1.1598 -1 = 15.98%
26.
Waiting time if investing is earning 18%
N= In(1,000,000.1,330) / In(1/18) = 6.6226/0.1655 = 40.0121 yrs
Waiting time if investment is earning 14%
N= In(1,000,000/1,330)/ In(1.14) = 6.6226/0.1310 = 50.5431 yrs
Waiting time if investment is earning 10%
N= In(1,000,000/1,330)/ In(1.10)= 6.6226/0.953= 69.4845 yrs
Chapter 4
4. recrudesce a. FV = $50 x (1.0725 -1)/0.07 = $50 x 63.2490 = $3,162.45
Part b. FV = $50 x (1.0710 -1)/0.07 = $50 x 13.8164 = $690.82 so the wet day fund is $9.18 short of being able to go the medical bill.
6.
5%10%25%
Year 1 = 3,0003,1503,3003,750
Year 2 = 5,0002,756.253,0253,906.
25
Year 3 through 7= 0000
Year 8 = 25,00036,936.3953,589.72149,011.61
8.
make out = Principal X (1 + rate)^years
25,000 X (1+ 0.09)^5 = 38, 465.59
25,000 X (1+ 0.09)^4 = 35,289.54
25,000 X (1+ 0.09)^3 = 32, 375.725
25,000 X (1+ 0.09)^2 = 29,702.5
25,000 X (1+ 0.09)^1 = 27,250
Total = 163,083.355
0 X (1+ 0.08)^20 = 0
0 X (1 + 0.08) ^1 = 0
200,000 X (1 + 0.07)^30 = 1,522,451
200,000 X (1 + 0.07)^29= 1,422,851.41
200,000 X (1 + 0.07)^28= 1,242,773.52
200,000 X (1 + 0.07)^27= 1,242,773.52
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200,000 X (1 + 0.07)^5= 280,510.34
200,000 X (1 + 0.07)^4= 262,159.20
200,000 X (1 + 0.07)^3= 245,008.6
200,000 X (1 + 0.07)^2 = 228,980
200,000 X (1 + 0.07)^1 =...If you want to get a full essay, instal it on our website: Orderessay
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