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RWJ HW C6

# RWJ HW C6 - 2 Enter 8 5 \$7,000 N I/Y PV PMT FV Solve for...

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fdb7eb265e9bfbcf9684fdd8763c16e02bd93067.doc 2. Enter 8 5% \$7,000 N I/Y PV PMT FV Solve for \$45,242.49 Enter 5 5% \$9,000 N I/Y PV PMT FV Solve for \$38,965.29 Enter 8 22% \$7,000 N I/Y PV PMT FV Solve for \$25,334.87 Enter 5 22% \$9,000 N I/Y PV PMT FV Solve for \$25,772.76 6. Enter 8 8.5% \$65,000 N I/Y PV PMT FV Solve for \$366,546.89 10. This cash flow is a perpetuity. To find the PV of a perpetuity, we use the equation: PV = C / r PV = \$20,000 / .08 = \$250,000.00 14. Enter 13.1% 12 NOM EFF C/Y Solve for 13.92% Enter 13.4% 2 NOM EFF C/Y Solve for 13.85% 18. Enter 6 365 11% / 365 \$45,000 N I/Y PV PMT FV Solve for \$23,260.62 22. Enter 1,733.33% 52 NOM EFF C/Y Solve for 313,916,515.69% 26. Enter 4 4 0.75% \$1,500 N I/Y PV PMT FV Solve for \$22,536.47 30. Lee Bertrand Page 1 5/12/2009

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fdb7eb265e9bfbcf9684fdd8763c16e02bd93067.doc Enter 18% 2 NOM EFF C/Y Solve for 17.26% 17.26% / 2 = 8.63% Enter 18% 4 NOM EFF C/Y Solve for 16.90% 16.90% / 4 = 4.22% Enter 18% 12 NOM EFF C/Y Solve for 16.67% 16.67% / 12 = 1.39% 38. Since your salary grows at 4 percent per year, your salary next year will be: Next year’s salary = \$50,000 (1 + .04) Next year’s salary = \$52,000 This means your deposit next year will be: Next year’s deposit = \$52,000(.02) Next year’s deposit = \$1,040 Since your salary grows at 4 percent, you deposit will also grow at 4 percent. We can use the
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