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Math 1160 – Section 10.2 Answer Key
2a.
i = .005 or .5%
n = 240
R = $520
P = $72582
2b.
i = .02 or 2%
n = 20
R = $700
P = $11446
4.
$626.02 (outflow of cash to you)
N = 14
I% = 2
PV = 0
PMT = ?
FV = 10000
6.
$7360.09 (outflow of cash to you)
N = 10
I% = 6
PV = ?
PMT = 1000
FV = 0
8a.
$18,498.93 (inflow of cash to you)
N = 20
I% = 1.5
PV = 0
PMT = 800
FV = ?
8b.
$2498.93 (inflow of cash)
b
$18,498.93  $16,000 ($800 x 20 payments)
OR
Σ
Int (1,20)
will sum the interest from compounding periods 1 through 20.
10.
$372.80 (outflow of cash each quarter)
N = 12
I% = 2
PV = 0
PMT = ?
FV = 5000
$526.40 interest
b
$5000  $4473.60 ($372.80 x 12 payments)
OR
Σ
Int (1,12)
will sum the interest from compounding periods 1 through 12.
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View Full Document14. $123.36 (inflow of cash)
N = 12
I% = .5
PV = 0
PMT = 10
FV = ?
18.
$750 per quarter is better.
(Find the FV of
receiving $750 per quarter for 3 years
and compare that value to $10,000.
Which is better?)
N = 12
I% = 2
PV = 0
PMT = 750
FV = Calculated as $10,059.07
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 Spring '08
 copeland
 Math

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