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Written Assignment #7

# Written Assignment #7 - 4.83 Problem#5 a \$1,000 \$9,000 =...

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Written Assignment 7 Chapter 25 Problem #3 a. SQRT(2 x 5 x 5000/3.50) = 119.53 = 120 units b. 120*365/5000 days = 8.76 days 5000/120 = 41.67 orders per year Problem #4 a. SQRT(2 x 60 x 30000/1.50) = 1,549.19 units = 1,549 units b. 300 + (1,549/2) = 1,074.5 units = 1,075 units c. 300 + 1,549 = 1,849 units d. 30,000/1,549 = 19 orders Problem #14 \$76,789(1 + i)^30/365 = \$77,345 \$76,789(1 + i)^.08219 = \$77,345 (1 + i)^.08219 = \$77,345/\$76,789 (1 + i)^.08219 = 1.00724 i = 1.0917 – 1 i = .0917 or 9.17% Chapter 26 Problem #2 Interest payment = \$65,000(.1)(4/12) = \$2,167 Origination fee = \$65,000(.015) = \$975 Amount received after discount = \$65,000 - \$2,167 - \$975 = \$61,858 Simple interst rate = \$3,142 / \$65,000 =

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Unformatted text preview: 4.83% Problem #5 a. \$1,000 / \$9,000 = 11.1% b. \$1,100 / \$10,000 = 11.0% Option A is the more expensive alternative. Problem #6 a. i = [.03/(1-.03)] x [360/(45-15)] = 37.1% compound i = 1.0309^(365/30) -1 = 44.8% b. i = [.02/(1-.02)] x [360/(30-10)] = 36.7% compound i = (1.0204^18.25) -1 = 44.6% Problem #9 Simple interest = \$1,000,000/\$982,500 = 1.0178 -1 = .0178/ (3/4) = 2.37% Compunded interest = 2.37%^(360/270) = 3.17% Problem #11 a. Bank A = 8% Bank B = 6.6% + 2% = 8.6% Bank A has better terms for a 1 year loan. b. Bank A = 8%(3/12) = 2% + .375% = 2.375% Bank B = 6.6%(3/12) = 1.65% + 2% = 3.65% Bank A has better terms for a 3 month loan....
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