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1st exam study problems #1
ANSWERS
1. I deposit $2000 now at an interest rate of 4.75% per year.
How much will I accumulate in 7 years?
a. Solve for FV:
$2,767.63
2. How many years would it take me to save $12,000
if I deposit $400 now and earn interest at a rate of 6.8% per year?
a. Solve for NPER:
51.7 years
3. What is the value today of $1,200,000 I expect to inherit
27 years from today if the inflation rate (think interest rate)
is 3.2% per year?
a. Solve for PV:
$512,660
4. I plan to invest $2600 now with hopes of growing it to $5000 in 4
years. What rate of return in % per month do I need to
accomplish this goal?
a. 4 years is equal to 48 months
b. Solve for RATE
Excel
1.37% per month
Formula
1.37% per month
5. I purchase a car today for $35,000. Terms of the deal are
4% down
with the balance financed over 60 months at an interest rate of 0.48%
per month. What is my monthly payment?.
a. Compute amount to be financed:
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This note was uploaded on 02/16/2012 for the course ENGR 265 taught by Professor Arnold during the Spring '09 term at Arizona.
 Spring '09
 ARNOLD

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