1
PV = 5000
N = 7
I = 7.25%
PMT = 0
FV = $ 8161.15
2
FV = 5,000,000
N = 5
I = 100%
PMT = 0
PV = $ 156,250
Investment (A) :
PV = 500
FV = 1000
N = 6
I = 12.2462 %
3
Investment (B) :
PV = 250
FV = 0
N = 10
PMT = 45
I = 12.4148 %
Step 1: Compute
future cost of trip
PV = 2250
N = 4
I = 6%
PMT = 0
FV = $ 2840.57
4
Step 2: Find required deposits
PV = 0
FV = 2840.57
N = 4
I = 2%
PMT = $ 689.19
5.7% APR, $2000 down
PV = 17854 – 2000 = 15854
FV = 0
N = 5
I = 5.7%
PMT = $ 3733.02
6.0% APR, $2500 down
PV = 17854 – 2500 = 15354
FV = 0
N = 5
I = 6.0%
PMT = $ 3644.98
5
5.5 % APR; how much down?
PMT = 3250
FV = 0
N = 5
I = 5.5%
PV = 13,878.42
17,854 – 13,878.42 =
3975.58 down
Additional Time Value of Money Problems
Answers :
© 2003 Brian J. Henderson & Joseph M. Marks
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 Fall '09
 FIN221
 Time Value Of Money, Net Present Value, Bank Two

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