Ch4 homework answer

Ch4 homework answer - Chapter 4 Q&P 1 The simple interest...

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1. The simple interest per year is: $6,000 × .07 = $420 So, after 10 years, you will have: $420 × 10 = $4,200 in interest. The total balance will be $6,000 + 4,200 = $10,200 With compound interest, we use the future value formula: FV = PV(1 + r ) t = $6,000(1.07) 10 = $11,802.91 The difference is: $11,802.91 – 10,200 = $1,602.91 Enter 10 7% ± $6,000 N I/Y PV PMT FV Solve for $11,802.91 2. FV = PV(1 + r ) t FV = $3,150(1.18) 3 = $ 5,175.55 FV = $7,810(1.06) 10 = $ 13,986.52 FV = $89,305(1.12) 17 = $613,171.78 FV = $227,382(1.05) 22 = $665,151.63 Enter 3 18% ± $3,150 N I/Y PV PMT FV Solve for $5,175.55 Enter 10 6% ± $7,810 N I/Y PV PMT FV Solve for $13,986.52 Enter 17 12% ± $89,305 N I/Y PV PMT FV Solve for $613,171.78 Enter 22 5% ± $227,382 N I/Y PV PMT FV Solve for $665,151.63 3. PV = FV / (1 + r) t PV = $15,451 / (1.04) 9 = $10,855.67 PV = $51,557 / (1.12) 4 = $32,765.41 PV = $886,073 / (1.22) 16 = $36,788.51 PV = $550,164 / (1.20) 21 = $11,958.76 Enter 9 4%
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This note was uploaded on 04/30/2008 for the course BCOR 2200 taught by Professor Tomnelson during the Fall '08 term at Colorado.

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Ch4 homework answer - Chapter 4 Q&P 1 The simple interest...

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