This preview shows pages 1–5. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: F1515 QUIZ 1 PART 2 ANSWER :1 (a) pay $1120 at end of the year r = (1 + i/n)^n I = 0.12 n = 1 r = (1 + (0.12/1))^1  1 = 12% By 1.73% EFF is higher in friends proposal (b) sticker price = $ 15000 down payment =$2000 due amount = $ 13000 nominal annual interest rate = 12% FV = PV( 1 + I /n) ^ n * y FV = 13000 (1 + 0.10/12)^ 12 * 5 FV = 21389.0161 Monthly payment FV/60 = $356.4836 PV = $100 FV = 100 (1 + 0.06/2)^ 2 * 0.5 = $103 withdraw $ 100, PV = $ 3 After 19.5 yrs FV = 3 (1 +0.06/2)^ 2 * 19.5 = $9.5011 ending balance after 20 yrs is $9.5011 (d) PV = $3000 r = 10% n = 36 years FV = PV (1 + r)^ n + c[((1+r)^n  (1+r))/r] FV = 3000 (1 + 0.1) ^ 36 + 3000 [ ((1.1)^36  1.1)/0.1] FV = $990118.48 (e) FV =$10000 after 6 yrs FV = PV (1 + i/n)^ n*y 10000 = PV(1 + 0.08/1)^ 1*6 PV = $ 7462.1297 Deposit today $ 7462.1297 pay $10 for 11 months and $1010 at last month r = (1 + i/n)^n i=0.12 n=12 r = (1 + (0.12/12))^ 12 1 = 13.73% Answer  2...
View
Full
Document
This note was uploaded on 01/27/2009 for the course FI FI515 taught by Professor Fi515 during the Spring '09 term at Dominican.
 Spring '09
 FI515

Click to edit the document details