Exam 1 Review Problem Solutions

# Exam 1 Review Problem Solutions - CSA 273 Solution to...

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CSA 273 Solution to Problems on Review Sheet for Test #1 Problem #1 Find amount to be invested monthly at 10% compounded monthly in order to accumulate \$1,000,000 in 40 years. Soln Invest \$158.13 every month for the next 40 years 1 m i 1 m i FV a m i 1 m i 1 a FV mn mn - + = - + = \$158.13 1 12 10 . 1 12 .10 1000000 a 40 n 12, m .10, i \$1,000,000 FV (12)(40) = - + = = = = =

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Problem #2 The purchase of an air - driven is being considered by an equipment renta l business for renta l to construc t i on contrac to rs who need and use such equipment on a temporary basis . The ant ic i pa ted receip ts and disbursements of this alterna t i ve are given in the fo l l ow ing table : Item Date Disbursements Net Receipts Cost 1- 1- 2008 \$18,500 ___ Rental , f i r s t year 1- 1- 2009 ___ \$7,500 Rental ,second year 1- 1- 2010 7,500 Overhaul 1- 1- 2011 2,500 ___ Rental , t h i r d year 1- 1- 2011 ___
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Exam 1 Review Problem Solutions - CSA 273 Solution to...

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