This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: Lecture Problem Solutions
Time Value of Money  Day 4 1. What is the present value of an investment that pays you $1,000 a month with the ﬁrst payment in 1
month and the last payment in 11 months if the discount rate is 1%
per month? s I N WW m we u I ? (000 0 END ?U=\i—IO(36?.4’2?ZS( 2. What is the present value of an investment that pays you $1,000 a month with the ﬁrst payment
tggayjnd the last payment in 11 months if the discount rate is 1% per month? +§ \o”ooo°.,a’ ‘03:?) M 1 "ﬁg PHT (:0 $0048 ‘\. \,  (’2. L .7 10°C 0 35510 W: {tweenas 3. If you borrow $25,000 at a rate of 0.7% per month and your monthly payment is $420, then how
many payments will it take to pay off your loan if your ﬁrst payment is due in a month and all
payments are equal? M I 'N I’HT F” ”04:
7 0.7 $5000 "(20 0 END (N: 711686850"! _______________/ 4. If you borrow $25,000 for 5 years and your monthly payment is $475, then what is the monthly interest rate associated with your loan if your W and all payments for the 5
years are equal? *$ 7,5,ooo N I FU fMT’ FU {Mule
(00 ? 25000 “HS 0 Eggm t
°  z ~> S‘t G°
3; var Esq? drag O, ”1557,0055ﬁ7 / 5. What is the present value of an investment that pays you $2,000 in 11 months plus $1 ,000 a month
with the ﬁrst $1,000 payment today and the last $1 ,000 payment in 11 months if the discount rate is 1%
per month? 0e CL" ‘3'5‘ TLA'l v)? 14‘“ 0‘4 aHAuti‘l‘ff 1'41 \J‘l'Hx (Z e944 {tYVCn/fg 0'; #/K for ”1°de sﬁf‘f'l‘ﬁ)‘ 110(4);
41¢! QIxahnz (‘q‘ l{ moa'ng. 04 «(So LtaVC a s>“5(g C? a? ‘1K (‘4 quc'i'fL/ ll moot (‘AS 7; ({4} TLLQ T1517“ PV) we was(L {fay TL‘4 Fl} oi" {'Lxe annui+r and The ?V :1; flu $35“ Cf— ..«X ”(j flaw “9411“”?
/ (aw :
m m I W“ 5"" M‘
7 H l a 2000 —' .7. W‘ #13171, M1435 6. What is the present value of an investment that pays you $2,000 in 6 months plus $1 ,000 a month
with the ﬁrst $1,000 payment today and the last $1,000 payment in 11 months if the discount rate is 1% permonth? ~ J“ ‘
Ti Aaqh \JQ la“): an dnﬂhtl'l‘YAdVLX 4 Stﬂolt CF Vic Must £l49¢ 7“ id 0‘? £4.41 _ '///3(o7. (93 + ‘//88"/.O‘I : 3 /;,zs(.7/?7Z MKJQ fl) *3 Z 7“? H
7 (p ( O 2060 A 21/: ~/, 8‘?‘/.O‘70‘(?( ...
View
Full Document
 Spring '09
 MURRAY

Click to edit the document details