F301
Problem Set One
Spring 2011
•
Please show your work in a professional, businesslike fashion. It should be neither crowded nor
illegibly tiny. Make this assignment look like something you could present to your boss.
•
Show your work in the form requested in the problem: either calculations and equations, or calculator
inputs with the TVM keys. No credit will be given without complete work.
•
Each problem is worth three points. Total possible points = 30.
1.
(
Solve this problem using the y
x
key on your calculator,
NOT
the TVM keys. Show your work
by writing out your calculations.
)
Six years ago, my grandmother purchased a Ferrari
Testarossa. Yesterday, she sold it for $353,642, which represented a rate of return of 18% per
year. How much did she pay for the car when she bought it six years ago?
2.
(
Solve this problem using the y
x
key on your calculator,
NOT
the TVM keys. Show your
calculations.
)
A money manager invested $12,000 in a mutual fund 42 months ago. The return
on the mutual fund has been 8.6% per year. How much is in there now, at the end of 42
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 Spring '12
 T
 Net Present Value, TVM Keys

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