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Ch6BriefExercises

# Ch6BriefExercises - SOLUTIONS TO BRIEF EXERCISES BRIEF...

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SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 6-1 8% annual interest i = 8% PV = \$15,000 FV = ? 0 1 2 3 n = 3 FV = \$15,000 (FVF 3, 8% ) FV = \$15,000 (1.25971) FV = \$18,895.65 8% annual interest, compounded semiannually i = 4% PV = \$15,000 FV = ? 0 1 2 3 4 5 6 n = 6 FV = \$15,000 (FVF 6, 4% ) FV = \$15,000 (1.26532) FV = \$18,979.80

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BRIEF EXERCISE 6-2 12% annual interest i = 12% PV = ? FV = \$25,000 0 1 2 3 4 n = 4 PV = \$25,000 (PVF 4, 12% ) PV = \$25,000 (.63552) PV = \$15,888 12% annual interest, compounded quarterly i = 3% PV = ? FV = \$25,000 0 1 2 14 15 16 n = 16 PV = \$25,000 (PVF 16, 3% ) PV = \$25,000 (.62317) PV = \$15,579.25
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% 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

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BRIEF EXERCISE 6-5 First payment today (Annuity Due) i = 12% R = FV – AD = \$8,000 \$8,000 \$8,000 \$8,000 \$8,000 ? 0 1 2 18 19 20 n = 20 FV – AD = \$8,000 (FVF – OA 20, 12% ) 1.12 FV – AD = \$8,000 (72.05244) 1.12 FV – AD = \$645,589.86 First payment at year-end (Ordinary Annuity) i = 12% FV – OA = ? \$8,000 \$8,000 \$8,000 \$8,000 \$8,000 0 1 2 18 19 20 n = 20 FV – OA = \$8,000 (FVF – OA 20, 12% ) FV – OA = \$8,000 (72.05244) FV – OA = \$576,419.52
BRIEF EXERCISE 6-6 i = 11% FV – OA = R = ? ? ? ? \$250,000 0 1 2 8 9 10 n = 10 \$250,000 = R (FVF – OA 10, 11% ) \$250,000 = R (16.72201)

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Ch6BriefExercises - SOLUTIONS TO BRIEF EXERCISES BRIEF...

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