460hw2

460hw2 - ISE 460 Fall 2006 Assignement 03 Solution...

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ISE 460 Fall 2006 Assignement 03 Solution 05/07/2009 No.1 All the interest rates, except for the mortgage, are higher than the return on the fund. The family should pay down all the debt, except the mortgage, before investing at 10%. No.2 Annual Decrease 12% Investment Interest rate Years Savings/unit Year Sales $70,000 12% 5 $0.75 2 1.00 3 0.88 Future value if invested $123,363.92 -FV(B7,C7,,A7) 4 0.77 5 0.68 Future value of each unit's savings $3.04 D7*(G10-FV(B7,1,,G9)-FV(B7,2,,G8)-FV(B7,3,,G7 3.34 Number of units/year2 to break even 40538 ROUND($C$9/$C$11,0) Number of units/year3 to break even 35673 Number of units/year4 to break even 31393 Number of units/year5 to break even 27626 Total 94692 Note: Total units without time value of money: 93333 No.3 r Monthly r A P n a) 12.68% Goal seek $600.00 $22,500.00 48 1.06% -PMT(B20/12,F20,E20) b) 9.00% 0.750% $559.91 did not need to calculate since 9% is better than 12.68% B22/12 -PMT(C22,F20,E20) The bank's offer is better No.4 A= Quaterly deposit
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460hw2 - ISE 460 Fall 2006 Assignement 03 Solution...

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