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Unformatted text preview: 610 1 2 3 4 5     PV = 10,000 FV5= ?FV5= $10,000(1.10)5= $10,000(1.61051) = $16,105.10.FV = PV(FVIF) = 10,000*1.6105 = $16,105620 5 10 15 20    PV = ? FV20= 5,000PV=FV(PVIF) = 5,000(.2584) = $1,292630 n = ? PV = 1 FVn= 22 = 1(1.065)n.You could try out different n’s and solve this by trial and error. With a financial calculator enter the following: I = 6.5, PV = 1, PMT = 0, and FV = 2. Solve for N = 11.01 ≈ 11 years.Using tables: 2=1(FVIF6.5%, n)FVIF6.5%, n= 2In the FVIF Table, look in the 6% and 7% columns and find the n where the FVIFs “bracket” [email protected]% for 11yrs = [email protected]% for 11 yrs = 2.1049Estimated n = 11 yrs.Answers and Solutions: 6  1Chapter 6Time Value of MoneySOLUTIONS TO ENDOFCHAPTER PROBLEMS10%7%6.5%660 1 2 3 4 5     300 300 300 300 300FVA5= ?With a financial calculator enter the following: N = 5, I = 7, PV = 0, and PMT = 300. Solve for FV = $1,725.22.FVA = PMT*FVIFA7%, 5= $300*5.7507 = $1,725.21610a. 1997 1998 1999 2000 2001 2002     6 12 (in millions)With a calculator, enter N = 5, PV = 6, PMT = 0, FV = 12, and then solve for I = 14.87%.FV = PV*(FVIFg, 5)12 = 6*(FVIFg, 5)FVIFg, 5= 2.0Look in the table for 2.0 on the n = 5 row: g = approx. 15%b. The calculation described in the quotation fails to take account of the b....
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This note was uploaded on 05/10/2010 for the course FMT 0438310384 taught by Professor Hung during the Spring '10 term at Aarhus Universitet, Aarhus.
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