# 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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