FCF 9th edition Chapter 06

# FCF 9th edition Chapter 06 - Chapter 6 Problems 1-78 Input...

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Chapter 6 Problems 1-78 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-In" be installed in Excel. To install these, click on the Office button then "Excel Options," "Add-Ins" and select "Go." Check "Analyis ToolPak" and "Solver Add-In," then click "OK."

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Chapter 6 Question 1 Input area: Output area: Discount rate 10% Year Cash flow 1 \$950 2 1,040 3 1,130 4 1,075 \$3,306.37
Chapter 6 Question 2 Input area: Discount rate 5% # of years for X 9 # of years for Y 6 Payment for X \$6,000 Payment for Y 8,000 Output area: Value of X \$42,646.93 Value of Y \$40,605.54

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Chapter 6 Question 3 Input area: Output area: Discount rate 8% Year Cash flow 1 \$940 2 1,090 3 1,340 4 1,405 \$5,307.71
Chapter 6 Question 4 Input area: Payment per year \$5,300 # of years 15 Required rate of return 7% Output area: Present value \$48,271.94 PV (forever) \$75,714.29

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Chapter 6 Question 5 Input area: Initial investment \$34,000 Interest rate on annuity 7.65% # of years 15 Output area: Annuity payment \$3,887.72
Chapter 6 Question 6 Input area: Annual savings \$73,000 # of years 8 Interest rate on annuity 8.5% Output area: Present value \$411,660.36

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Chapter 6 Question 7 Input area: Annual deposit \$4,000 # of years 20 Interest rate on annuity 11.2% Output area: Future value \$262,781.16
Chapter 6 Question 8 Input area: Desired amount \$90,000 # of years 10 Interest rate 6.8% Output area: Annual deposit \$6,575.77

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Chapter 6 Question 9 Input area: Desired amount \$50,000 # of years 7 Interest rate 7.50% Output area: Loan payment \$9,440.02
Chapter 6 Question 10,11 Input area: Desired amount \$25,000 Interest rate 7.20% Cost of policy \$375,000 Output area: Present value \$347,222.22 Required interest rate 6.67%

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Chapter 6 Question 12 Input area: Output area: Stated rate (APR) # of times per year Effective rate 8% 4 8.24% 16% 12 17.23% 12% 365 12.75% 15% Infinite 16.18%
Chapter 6 Question 13 Input area: Output area: Stated rate (APR) # of times per year Effective rate 8.42% 2 8.60% 18.20% 12 19.80% 8.99% 52 9.40% 15.27% Infinite 16.50%

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Chapter 6 Question 14 Input area: Output area: Stated rate (APR) # of times per year Effective rate First National Bank 14.2% 12 15.16% First United Bank 14.5% 2 15.03%
Chapter 6 Question 15 Input area: Output area: Stated rate (APR) # of times per year Effective rate 14.85% 365 16% The borrower is actually paying annualized interest of 16% per year, not the 14.85% reported on the loan contract.

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Chapter 6 Question 16 Input area: Deposit \$2,100 # of years 17 Interest rate 8.4% # of times compounded per year 2 Output area: Future value \$8,505.93
Chapter 6 Question 17 Input area: Interest rate 9.30% # of times compounded per year 365 Deposit \$4,500 # of years 5 Output area: Future value \$7,163.64

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Chapter 6 Question 18 Input area: Future value of investment \$58,000 # of years 7 Discount rate 10% # of times compounded per year 365 Output area: Present value of investment \$28,804.71
Chapter 6 Question 19 Input area: Interest rate 30% Compounding periods 12 Output area: APR 360.00% EAR 2229.81%

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Chapter 6 Question 20 Input area: Future value of investment \$68,500 Discount rate 6.9% # of years 5 # of times compounded per year 12 Output area: Payment \$1,353.15 Effective interest rate 7.12%