PS 3 - Present, Future Worth Factors

# PS 3 - Present, Future Worth Factors - Allow(1.08 100 c A...

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IE 150 Problem Set 3 Present and Future Worth Factors Instructions:  Write/Type/Print your answers on yellow pad or bond paper (NO A4’s). Use a different sheet per  problem.  Use phrases  to describe what you are doing. Do not present it as just a series of equations and  numbers.  Label each step. Ex: “Step 1: Set-up the Total Revenue Equation”, “Step 4: Solve for the NPV”.  Box the final answers.  Use clear formatting: Indent at each step. Show your answers in just 1 column. (The problem set  will be read from top to bottom, and not top bottom diagonal right bottom.) Problem 1:  If you save 10% of your monthly allowance and invest the total amount at the end of the year, how much  will it be 100 years from now if you invested in: a. A bank that yields 3% per year.  Allow(1.03) 100 b. A government bond that yields 8% per year.

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Unformatted text preview: Allow(1.08) 100 c. A mutual fund that grows 15% per year. Allow(1.15) 100 (State how much 10% of your monthly allowance is, this could be a false figure). (200 years from now. .. could be a gift for your great grand children). .. Problem 2: A friend you have not seen for more than 5 years suddenly appears at your house giving you PhP18, 000. He said it was from a loan 8 years ago. If you remember that your terms for the loan were at 3% every year, how much did you let him borrow 8 years ago? 18000 = P (1.08) 8 P = 14,209.37 Problem 3: What is the interest rate of borrowing from a 5-6? (Wherein you borrow PhP 5.00, and the next day you need to pay him PhP 6.00. 6 = 5 (1+i) 1 6/5 – 1 = i i = .2 or 20% IE 150 Problem Set 3 Present and Future Worth Factors...
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PS 3 - Present, Future Worth Factors - Allow(1.08 100 c A...

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