CH5 - Int Prin Balance End 1 $60,000 $23,703.29 60,000 *...

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2. Investment N I/Y PMT PV X @ 6% 9 6 4,300 $29,247.28 X @ 22% 9 22 4,300 $16,281.03 Y@ 6% 5 6 6,100 $25,695.42 Y @ 22% 5 22 6,100 $17,468.20 @ 6 % investment X has higher pv @ 22 % investment Y has higher pv 3. Investment N I/Y 1 2 3 4 FV 8% 4 8% 910 1,140 1,360 2,100 $6,044.83 11% 4 11% 910 1,140 1,360 2,100 $6,258.24 24% 4 24% 910 1,140 1,360 2,100 $7,274.29 9. N I/Y PV PMT FV 7 9% 60,000 11,921.4 3 0 10. Perpetuity = $35,000/.06 = $583,333.00 I will need to pay $583,333.00 for 35,000 perpetuity payments 12. APR # of times compounde d EAR 8% 4 8.24% 18 12 19.56 14 365 15.02 10 2 10.25 13. APR # of times compounde d EAR 11.66% 2 12% 7.72 12 8 12.24 52 13 10.44 365 11 19. APR = 15% * 12 months = 180%
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APR # of times compounde d EAR 180% 12 435.03% 55. Year Beg Balance Payment
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Unformatted text preview: Int Prin Balance End 1 $60,000 $23,703.29 60,000 * .09 = 5,400 $18,303.29 $41,696.71 2 41,696.71 $23,703.29 41,696.71 *.09 = 3,752.70 $19,950.59 21,746.13 3 21,746.13 $23,703.29 21,746.12 *.09 = 1,957.15 $21,746.13 Year 3 interest = $1,957.15 Total interest = $11,109.85 56. Year Beg Balance Payment Int Prin Balance End 1 $60,000 $25,400 60,000 * .09 = 5,400 $20,000 $40,000 2 40,000 $23,600 40,000*.09 = 3,600 $20,000 20,000 3 20,000 $21,800 20,000 *.09 = 1,800 $20,000 Year 3 interest = $1,800 Total Interest = $10,800...
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This note was uploaded on 01/23/2012 for the course MGT 111 taught by Professor Unknown during the Spring '11 term at Washington State University .

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CH5 - Int Prin Balance End 1 $60,000 $23,703.29 60,000 *...

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