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ENG 106
Homework #2 solution
Winter 20 12
Time Value of Money (continued):
2.32d What is the present worth of $9000 at the end of each year for 30 years at 8.75% interest compounded
annually? (use equation 2.10, because appendix B doesn't have i=
r=
8.75%)
I
:
$1000 a year,
:
Over 30 years
2.36 Five annual deposits in the amounts of $1,200, $1,000, $800, $600 and $400 are made into a fund that pays
interest at a rate of 9% compounded annually. Determine the amount in the fund immediately after the fifth deposit.
F
=
$1200 (FIA, 9%, 5)

$200 (FIG, 9%, 5)
=
$1200 (FIA, 9%,5)

$200 (PIG, 9%, 5) (FIP, 9%, 5)
=
$4,993.4 1
2.38 What is the equalpayment series for 10 years that is equivalent to a payment series starting with $15,000 at the
end of the first year, and decreasing by $3,000 each year over 10 years? Interest is 9% compounded annually.
(answer: $3606.60)
Find an [equalpayment series]
=
[gradient series]
A
=
15000

G (AIG.
I, N)
=
15000

3000 (AIG, 9%. 10)
=
3,606.6
A
=
15000
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 Spring '12
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