UGBA 103 _2.1 Answers

UGBA 103 _2.1 Answers - 2.20(a 2.20(a...

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UGBA 103 #2 Answers 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 A B C D E F 2.15 (a) (b) (c) (d) 2.16 (a) (b) -700.00 -700.00 -85000.00 -9000.00 $881.17 $895.42 749.00 749.00 0.00 2684.50 0.00 2684.50 7.00% 7.00% 0.00 2684.50 2.16 (c) (d) 0.00 2684.50 0.00 2684.50 $903.06 $908.35 0.00 0.00 14.99% 0.00 0.00 201,229.00 9.00% 2.17 (a) (b) (c) $279.20 $276.84 $443.72 2.19 Universal effective rate is given at 7%. Solve for the effective rate of Regional = 6.14%. Clearly, Universal is better. However, Regional might be chosen if the individual thinks they might want to withdraw money in less than 1 year.
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Unformatted text preview: 2.20 (a) 2.20 (a) 2.20 (a) ($6,594.94) ($13,189.87) ($8,137.27) See page 69 for the formula that would be written out on the exam. 2.27 PV = 100/.07 PV = 100/.14 PV = $1,428.57 PV = $714.29 2.28 First calculate the effective rate of int on the bank account = 8.24%. Now, discount the investment using 8.24%. 50 50 50 1,050.00 PV = 893.26 The investment has a PV < investment cost, so the bank account is a better investment....
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