Selected Solutions - 4

Selected Solutions - 4 - SOLUTIONS TO SELECTED PROBLEMS...

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SOLUTIONS TO SELECTED PROBLEMS Student: You should work the problem completely before referring to the solution. CHAPTER 4 Solutions included for problems 1, 4, 7, 10, 13, 16, 19, 22, 25, 28, 31, 34, 37, 40, 43, 46, 49, 52, 55, 58, 61, 64, 67, 70, and 73 4.1 (a) monthly (b) quarterly (c) semiannually 4.4 (a) 1 (b) 4 (c) 12 4.7 (a) 5% (b) 20% 4.10 i = (1 + 0.04) 4 – 1 = 16.99% 4.13 0.1881 = (1 + 0.18/m) m – 1; Solve for m by trial and get m = 2 4.16 (a) i/week = 0.068/26 = 0.262% (b) effective 4.19 From 2% table at n=12, F/P = 1.2682 4.22 F = 2.7(F/P,3%,60) = \$15.91 billion 4.25 P = 1.3(P/A,1%,28)(P/F,1%,2) = \$30,988,577 4.28 F = 50(20)(F/P,1.5%,9) = \$1.1434 billion 4.31 i/wk = 0.25% P = 2.99(P/A,0.25%,40) = \$113.68 4.34 P = (14.99 – 6.99)(P/A,1%,24) = 8(21.2434) = \$169.95 4.37 2,000,000 = A(P/A,3%,8) + 50,000(P/G,3%,8) A = \$117,665 Chapter 4 1

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4.40 Move deposits to end of compounding periods and then find F: F = 1800(F/A,3%,30) = \$85,636 4.43 Move monthly costs to end of quarter and then find F:
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Unformatted text preview: Monthly costs = 495(6)(2) = \$5940 End of quarter costs = 5940(3) = \$17,820 F = 17,820(F/A,1.5%,4) = \$72,900 4.46 0.127 = e r – 1 r/yr = 11.96% r /quarter = 2.99% 4.49 i = e 0.02 – 1 = 2.02% per month A = 50(A/P,2.02%,36) = 50{[0.0202(1 + 0.0202) 36 ]/[(1 + 0.0202) 36 – 1]} = \$1,968,000 4.52 Set up F/P equation in months: 3P = P(1 + i) 60 3.000 = (1 + i) 60 i = 1.85% per month (effective) 4.55 First move cash flow in years 0-4 to year 4 at i = 12%: F = \$36,543 Now move cash flow to year 5 at i = 20%: F = 36,543(F/P,20%,1) + 9000 = \$52,852 4.58 Answer is (d) 4.61 Answer is (d) 4.64 i/semi = e 0.02 –1 = 0.0202 = 2.02% Answer is (b) 4.67 P = 7 + 7(P/A,4%,25) = \$116.3547 million Answer is (c) 4.70 PP>CP; must use i over PP (1 year); therefore, n = 7 Answer is (a) 4.73 Deposit in year 1 = 1250/(1 + 0.05) 3 Chapter 4 2 = \$1079.80 Answer is (d) Chapter 4 3...
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• Fall '07
• CPKoelling
• Prime number, 2%, 1.85%, \$5940, 2.99%

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