02 -- Time Value of Money

02 -- Time Value of Money - Click to edit Master subtitle...

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Unformatted text preview: Click to edit Master subtitle style 3/23/11 Time Value of Money Chapter 5 Tutorial 2 3/23/11 Problem 5- 29 You need to find the effective periodic rate instead of the EAR. This means that you will need to increase your prices by 3.0449% so that it will not cost you anything to carry the receivables. ( 29 90 12% 1 1 3.0449% 360 EPR = +- = 3/23/11 Problem 5- 30 ( 29 ( 29 1 1 6% 1,000,000 30,000 1 6% 5,000 6% 38.74 25 38.74 63.74 n n Erika n age- - + = + + = = + = N 38.74 I/Y 6 P M T 5,000 PV 30,000 FV-1 M ( 29 ( 29 1 1 20% 1,000,000 30,000 1 20% 5,000 20% 16.04 25 16.04 41.04 n n Kitty n age- - + = + + = = + = N 41.04 I/Y 20 P M T 5,000 PV 30,000 FV-1 M 3/23/11 Problem 5-30 (b & c) If Erika wishes to reach the investment goal at the same time as Kitty, she will need to contribute $35,825.33 per year....
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This note was uploaded on 03/23/2011 for the course ECON 200 taught by Professor 1212 during the Three '11 term at Curtin.

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02 -- Time Value of Money - Click to edit Master subtitle...

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