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