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Unformatted text preview: E918 Judge Drago problem Year 0 PV Year 1 Year 2 Year 3 Year 4 13,000 13,000 13,000 13,000 9% interest how much to invest right now? 13,000 (9% 13,000 (3.2397) = $42, 116.10 E919 Investment problem $11,000 Year 0 PV Year 1 Year 2 Year 3 11,000 30,000 50,000 interest = 10% you don’t have an annuity, you must take each future amount and discount PV11= 11,000 (1.10) ^1 PV = 30,000 (1.10) ^ 1 0.91 E920 An investment will pay $15,000 at the end of each year for eight years and a determine the PV of this investment usinga 7% interest rate Year 0 year 1 year 2 year 3 … 15,000 15,000 15,000 120,000 (.5820)= 69,840 0 PV P8 PV of annuity 15,000 at 7% for eight years 15,000 x (5. 9713) = 89, 569.50 added together = 159, 409.50 E915 Pv 50,000(1.10)^3 37,565 50,000(.7513) Truck note payable 37,565 37,565 interest expense 3756.5 note payable 3756.5 25660 25660 ch future amount and discount back to PV 10,000 24,292 37,565 72386 0.82 f each year for eight years and a one time payment of $120,000 at the end of the eight year. 7% interest rate year 7 year 8 15,000 15,000 50,000 0.51 25660 ...
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This note was uploaded on 12/01/2009 for the course H ADM 121 at Cornell University (Engineering School).
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