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Chapter 06  Time Value of Money Concepts
EXERCISES
1.
PV
=
$20,000 (.50835)
=
$10,167
Present value of $1: n=10, i=7% (from Table 2)
2.
PV
=
$14,000 (.39711)
=
$5,560
Present value of $1: n=12, i=8% (from Table 2)
3.
PV
=
$25,000 (.10367)
=
$2,592
Present value of $1: n=20, i=12% (from Table 2)
4.
PV
=
$40,000 (.46651)
=
$18,660
Present value of $1: n=8, i=10% (from Table 2)
61
Chapter
6
Time Value of Money Concepts
Exercise 63
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PV of $1
Payment
i
=8%
PV
n
First payment:
$5,000
x
.92593
=
$
4,630
1
Second payment
6,000
x
.85734
=
5,144
2
Third payment
8,000
x
.73503
=
5,880
4
Fourth payment
9,000
x
.63017
=
5,672
6
Total
$21,326
Exercise 68
1.
PVA
=
$5,000 (3.60478)
=
$18,024
Present value of an ordinary annuity of $1: n=5, i=12% (from Table 4)
2.
PVAD =
$5,000 (4.03735)
=
$20,187
Present value of an annuity due of $1: n=5, i=12% (from Table 6)
3.
PV of $1
Payment
i
= 3%
PV
n
First payment:
$5,000
x
.88849
=
$
4,442
4
Second payment
5,000
x
.78941
=
3,947
8
Third payment
5,000
x
.70138
=
3,507
12
Fourth payment
5,000
x
.62317
=
3,116
16
Fifth payment
5,000
x
.55368
=
2,768
20
Total
$17,780
62
Exercise 64
Chapter 06  Time Value of Money Concepts
Exercise 69
1.
PVA
=
$3,000 (3.99271)
=
$11,978
Present value of an ordinary annuity of $1: n=5, i=8% (from Table 4)
2.
$242,980
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This note was uploaded on 10/25/2011 for the course ACG 3341 taught by Professor Jomosankara during the Spring '09 term at FAU.
 Spring '09
 JomoSankara

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