HallHomework2

# HallHomework2 - FI360 Week 2 Homework Randall Hall...

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FI360: Week 2 Homework Randall Hall Professor Trevino, I took this class previously, so I had some of the homework already done, and some of these answers are a copy from that previous work. Thanks, Randy Problem 3-1 a. 1. \$1,500 x (1.07) ^3 = \$1,500 x 1.225 = \$1,837.57 2. \$1,500 x (1.07) ^6 = \$1,500 x (1.501) = \$2,251.10 3. \$1,500 x (1.07) ^9 = \$1,500 x (1.838) = \$2,757.69 b. 1. \$1,837.57 - \$1,500.00 = \$337.57 2. \$2,251.50 - \$1,837.57 = \$413.93 3. \$2,757.69 - \$2,251.50 = \$506.19 c. The amount if interest increases because of the longer length of time that the principal amount of \$1,500 is invested, and due to the earned interest also gaining interest (compounding). Problem 3-2 a. 1. \$1,000,000 x (1.06) ^-10 = \$1,000,000 x .558395 = \$558,395 2. \$1,000,000 x (1.09) ^-15 = \$1,000,000 x .274538 = \$274,538 3. \$1,000,000 x (1.12) ^-15 = \$1,000,000 x .182696 = \$182,696 b. 1. \$1,000,000 x (1.06) ^-15 = \$1,000,000 x .417265 = \$417,265 2. \$1,000,000 x (1.09) ^-10 = \$1,000,000 x .422411 = \$422,411

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## This note was uploaded on 07/10/2011 for the course FI 360 taught by Professor Tavbin during the Fall '08 term at Park.

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HallHomework2 - FI360 Week 2 Homework Randall Hall...

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