MGMT 351

MGMT 351 - BRIEF EXERCISE 6-3 i= PV = \$30,000 \$150,000 FV =...

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BRIEF EXERCISE 6-3 i = ? PV = \$30,000 FV = \$150,000 0 1 2 19 20 21 n = 21 FV = PV (FVF 21, i ) PV = FV (PVF 21, i ) OR \$150,000 = \$30,000 (FVF 21, i ) \$30,000 = \$150,000 (PVF 21, i ) FVF 21, i = 5.0000 PVF 21, i = .20000 i = 8% i = 8%

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BRIEF EXERCISE 6-4 i = 5% PV = \$10,000 FV = \$17,100 0 ? n = ? FV = PV (FVF n, 5% ) PV = FV (PVF n, 5% ) OR \$17,100 = \$10,000 (FVF n, 5% ) \$10,000 = \$17,100 (PVF n, 5% ) FVF n, 5% = 1.71000 PVF n, 5% = .58480 n = 11 years n = 11 years
EXERCISE 6-10 (a) The number of interest periods is calculated by first dividing the future value of \$1,000,000 by \$148,644, which is 6.72748—the value \$1.00 would accumulate to at 10% for the unknown number of interest periods. The factor 6.72748 or its approximate is then located in the Future Value of 1 Table by reading down the 10% column to the 20-period line; thus, 20 is the unknown number of years Mark must wait to become a millionaire. (b)

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MGMT 351 - BRIEF EXERCISE 6-3 i= PV = \$30,000 \$150,000 FV =...

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