Chap006[1]

# Chap006[1] - Chapter 06 - Time Value of Money Concepts...

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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) 6-1 Chapter 6 Time Value of Money Concepts Exercise 6-3

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Chapter 06 - Time Value of Money Concepts 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 6-8 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 6-2 Exercise 6-4
Chapter 06 - Time Value of Money Concepts Exercise 6-9 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.

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Chap006[1] - Chapter 06 - Time Value of Money Concepts...

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