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

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