Week3QuizPart2V2

Week3QuizPart2V2 - F1515 QUIZ 1 PART 2 ANSWER:1(a pay \$1120...

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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

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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%

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This note was uploaded on 01/27/2009 for the course FI FI515 taught by Professor Fi515 during the Spring '09 term at Dominican.

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Week3QuizPart2V2 - F1515 QUIZ 1 PART 2 ANSWER:1(a pay \$1120...

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