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#4
The formula for future amount using simple interest is
A = P ( 1 + rt )
given
P = $1200, r = 0.07, t = 8 months =
8
2
years =
12
3
2
A = 1200 1 + 0.07
3
A = $1256
#6.
We have
A = P ( 1 + rt )
P=
A
1 + rt
10 5
= years
12 6
So we get
3100
P=
5
1 + 0.05
6
P = $2976 is the principal
#42.
The future value using compound interest is given by
nt
A = P 1 +
n
Here we have P = $10, 000, r = 0.1082, n = 4 ( quaterly ) , t = 5.5
We get
0.1082
A = 10000 1 +
A = $17989.33
5.5*4
#16
Here we use the annuity formula
n
S ( 1 + i ) 1
FV =
i
0.08
i=
12
S = $100
n = 6 ( 12 ) = 72
We get
0.08 72
100 1 +
1
12
FV =
0.08
12
FV = $9202.53
#28.
We need to find the present value corresponding to an investment of $2400 to $3000 per
month at 8% interest
So we have
R 1 (1+ i)
0.08
, n = 30 ( 12 ) = 360
12
0.08 360
2400 1 1 +
12
PV =
0.08
12
PV = $327080.39
R = 2400, i =
R 1 (1+ i)
0.08
, n = 30 ( 12 ) = 360
12
0.08 360
3000 1 1 +
12
PV =
0.08
12
PV = $408850.48
R = 3000, i =
So the price range that is to be considered now will be between 327,080.39 and
408,850.48
5.3
#6
The formula is given by
R=
Pi
1 ( 1 + i ) n
0.105
P = 80, 000, i =
, n = 12 ( 30 ) = 360
12
So we get
R=
0.105
80000
12
0.105 360
1 1 +
12
#20.
R=
Pi
1 ( 1 + i ) n
0.12
P = 30, 000, i =
, n = 12 ( 10 ) = 120
12
So we get
R=
0.12
30000
12
0.12 120
1 1 +
12
R = $430.41 is the monthly payment required
#30.
For sin king funds the amount of deposits is
Fi
S=
( 1 + i ) n 1
0.1
F = 20000, i =
, n = 4 ( 3) = 12
4
0.1
20000
S=
0.1 12
1 +
1
4
S = $1449.74
$1449.74 needs to be deposited quaterly
#46
Monthly payment for 15 years term is given by the formula
R=
Pi
1 ( 1 + i ) n
0.06
P = 200, 000, i =
, n = 12 ( 15 ) = 180
12
So we get
R=
0.06
200000
12
0.06 180
1 1 +
12