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2009-04-15_201930_PV

# 2009-04-15_201930_PV - 1.718186 Multiplying Factor with beg...

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Question 1 Beg Balance Interest Ear Ending Balance Payment Balance Remaining We will calculate PV value of annuity due at end of each year \$84,939.08 \$4,246.95 \$89,186.04 11000 78186.04 PV = (\$84,939.08) 78186.0384320846 \$3,909.30 \$82,095.34 11000 71095.34 71095.3403536889 \$3,554.77 \$74,650.11 11000 63650.11 Note we can also use annuity table to get value of ( 7%, 10 Period) 7.72173545 63650.1073713733 \$3,182.51 \$66,832.61 11000 55832.61 Multiplying above factor with annual installment 55832.612739942 \$2,791.63 \$58,624.24 11000 47624.24 PV= 7.72173545 X 11000 84939.08995 47624.2433769391 \$2,381.21 \$50,005.46 11000 39005.46 39005.455545786 \$1,950.27 \$40,955.73 11000 29955.73 29955.7283230753 \$1,497.79 \$31,453.51 11000 20453.51 20453.5147392291 \$1,022.68 \$21,476.19 11000 10476.19 10476.1904761906 \$523.81 \$11,000.00 11000 0 Question 2 Value at End of Seventh Year 52990.7887237882 Value at End of Eighth Year 56700.1439344534 We can also use FV factor (7% 8 Period) 1.605781 We can also use FV factor (7% 7 Period)
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Unformatted text preview: 1.718186 Multiplying Factor with beg Amount of 33000 Future Value at End of Seventh Year 33000 X 1.605781 52990.773 Future Value at End of Eighth Year 33000 X 1.718186 56700.138 Question 3 Year 1 First we will calculate Future value of 1500 in 3 years Amount Deposited 2,579.79 Total at end of year 1 2,579.79 FV= 1786.524 Year 2 So the remaining amount to be accumulated = 8213.476 Beg balance 2,579.79 Amount Deposited 2,579.79 Interest 154.79 Now applying PMT(Value to be contribute at each year End) formula we get 5,314.37 PMT= (\$2,579.78) Year 3 Beg balance 5,314.37 Solving by anothor Method Interest 318.86 Amount Deposited 2,579.79 OR we know the following formula for Fvoa Ending Balance 8,213.02 Ending Balance 8,213.02 where Add FV of 1500 1,786.52 Fvoa 8213.47 Total 9,999.54 PMT ? i 0.06 n 3 therefore PMT=Fvoa/ [((1 + i)n - 1) / i] PMT= 2579.78 FVoa = PMT [((1 + i) n- 1) / i]...
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