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Ch6 HW

# Ch6 HW - Francis Roman Chapter 6 1 Given Discount Rate Year...

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Francis Roman Chapter 6 February 27, 2008 1. Given: Discount Rate: 10% 18% 24% Year 1 \$1,100.00 \$1,100.00 \$1,100.00 Year 2 \$720.00 \$720.00 \$720.00 Year 3 \$940.00 \$940.00 \$940.00 Year 4 \$1,160.00 \$1,160.00 \$1,160.00 Equation: Solution: \$3,093.57 \$2,619.72 \$2,339.03 2. Given Investment: X X Y Y Discount Rate: 5% 22% 5% 22% Year 1 \$7,000.00 \$7,000.00 \$9,000.00 \$9,000.00 Year 2 \$7,000.00 \$7,000.00 \$9,000.00 \$9,000.00 Year 3 \$7,000.00 \$7,000.00 \$9,000.00 \$9,000.00 Year 4 \$7,000.00 \$7,000.00 \$9,000.00 \$9,000.00 Year 5 \$7,000.00 \$7,000.00 \$9,000.00 \$9,000.00 Year 6 \$7,000.00 \$7,000.00 Year 7 \$7,000.00 \$7,000.00 Year 8 \$7,000.00 \$7,000.00 Equation: PVa = C{[1-(1/(1+R)^T)]/R} Solution: \$45,242.49 \$25,334.87 \$38,965.29 \$25,772.76 3. Given Discount Rate: 8% 11% 24% Year 1 \$700.00 \$700.00 \$700.00 Year 2 \$950.00 \$950.00 \$950.00 Year 3 \$1,200.00 \$1,200.00 \$1,200.00 Year 4 \$1,300.00 \$1,300.00 \$1,300.00 Equation: FV=CF{[(1+r)^t-1]/r} Solution \$4,585.88 \$4,759.84 \$5,583.36 4. Given Investment \$4,600.00 Required Return 8% Time 1 15 years Time 2 40 years Time 3 75 years Time 4 Forever Equation: PVa = C{[1-(1/(1+R)^T)]/R} PVp = C / R Solution: 15 Years \$39,373.60 40 Years \$54,853.22 75 Years

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Ch6 HW - Francis Roman Chapter 6 1 Given Discount Rate Year...

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