SOLUTIONS CHAPTER 6

SOLUTIONS CHAPTER 6 - SOLUTIONS CHAPTER 6 BRIEF EXERCISE...

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SOLUTIONS CHAPTER 6 BRIEF EXERCISE 6-7 12% annual interest i = 12% PV = ? FV = $300,000 0 1 2 3 4 5 n = 5 PV = $300,000 (PVF 5, 12% ) PV = $300,000 (.56743) PV = $170,229 BRIEF EXERCISE 6-8 With quarterly compounding, there will be 20 quarterly compounding periods, at 1/4 the interest rate: PV = $300,000 (PVF 20, 3% ) PV = $300,000 (.55368) PV = $166,104
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BRIEF EXERCISE 6-14 i = 8% PV – OA = R = ? $25,000 $25,000 $25,000 $25,000 0 1 2 3 4 5 6 11 12 n = 4 n = 8 PV – OA = $25,000 (PVF – OA 12–4, 8% ) PV – OA = $25,000 (PVF – OA 8, 8% )(PVF 4, 8% ) OR PV – OA = $25,000 (7.53608 – 3.31213) PV – OA = $25,000 (5.74664)(.73503) PV – OA = $105,599 PV – OA = $105,599
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BRIEF EXERCISE 6-15 i = 8% PV = ? PV – OA = R = $2,000,000 ? $140,000 $140,000 $140,000 $140,000 $140,000 0 1 2 8 9 10 n = 10 $2,000,000 (PVF 10, 8% ) = $2,000,000 (.46319) = $ 926,380 $140,000 (PVF – OA 10, 8% ) = $140,000 (6.71008) 939,411 $1,865,791 BRIEF EXERCISE 6-16 PV – OA = $20,000 $4,727.53 $4,727.53
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This note was uploaded on 03/16/2010 for the course BUSACC 1205 taught by Professor Boyas during the Spring '10 term at Pittsburgh.

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SOLUTIONS CHAPTER 6 - SOLUTIONS CHAPTER 6 BRIEF EXERCISE...

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