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newnanta3 - Chapter3:InterestandEquivalence Solution31 P =...

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Chapter 3: Interest and Equivalence  Solution 3-1 P = $3,000. F = $3,405. N = 1.5 Years. Interest Earned = F - P = $3,405 - $ 3,000 = $405. For simple interest rate, interest earned = P × i × n. 405 = 3,000 × i × 1.5. i= 405 / 4,500 = 0.09 = 9% per year. Solution 3-2 F = P × (1 + r/m) n × m . The correct choice is (f), None of the above. Solution 3-3 P = $10,000 F = $20,000 i =12% n =? 20,000 = 10,000 +{10,000 ×(0.12) × n} n = 10,000 /{(10,000) ×(0.12)}= 8.33 years. Solution 3-4 i = 5%. F = 2 × P. 2 × P = P × (1 + i) n . 2 = (1 + i ) n . 2 = 1.05 n . n = ln (2) / ln (1.05) = 14.2 Years. Solution 3-5 F = $1,850. n = 12/2002 To 12/2009 = 7 Years. i = 6%. P = F (P/F, i, n) = $1,850 (0.6651) = $ 1,230.44 Solution 3-6 P = $1,295. n = 12/1995 To 12/2002 = 7 Years. i = 6%. F = P (F/P, i, n) = 1,295 (F/P, 6%, 7) = 1,295 (1.504) = $1,947.68.
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Solution 3-7 The correct choice is C, Single Payment Present Worth Factor. Solution 3-8
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newnanta3 - Chapter3:InterestandEquivalence Solution31 P =...

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