*This preview shows
page 1. Sign up to
view the full content.*

**Unformatted text preview: **1
= $1500 0.030377509 = $40,460.694
For the next 15 years, PMT = $1500;
1
n = 2(15) = 30; i = 7% = 7%; c = 2 = 0.5
1 0.5
i2 = (1 + i ) c − 1 = (1.07) – 1 = 0.024695077
The combined future value at the end of the 25 years is 1.024695077 30 − 1
$40,460.694 (1.07) 15 + $1500 0.024695077 = $111,632.330 + $76,684.027
= $188,316.36 Same PMT, P/Y
7 I/Y C/Y 1 ENTER 30 N 40460.694 + / – PV CPT FV Ans: 188,316.36 Exercise 10.5 (continued)
27. For the first 10 years, i =
PMT = $1000; n = 10; c = 7.5%
12
12
1 = 0.625%;
7.5 I/Y P/Y 1 ENTER C/Y 12 ENTER 10 N 0 PV 1000 + / – PMT
CPT FV Ans: 14,324.71 = 12 i2 = (1 + i ) − 1 = (1.00625 ) 12 – 1
= 0.077632599 (1 + i ) n − 1
FV = PMT i 1.077632599 10 − 1 = $1000 0.077632599 – 1 = $14,324.71
c and Same PMT, P/Y
8 I/Y C/Y 2 ENTER 15 N 14324.71 + / – PV
Business Mathematics in Canada, 7/e CPT FV Ans: 73,953.35 For the next 15 years, PV = $14,324.71; PMT = $1000;
i = 8% = 4%; c = 2 = 2; n = 15
1
2 72 and i2 = (1 + i ) c − 1 = (1.04 ) 2 – 1 = 0.0816
The combined future value after 25 years will be
15 − 1
30 + $1000 1.0816 $14,324.71 (1.04 ) 0.0816 = $73,953.35 Chapter 10: Ordinary Annuities: Future Value and Present Value 73 Exercise 10.5 (continued)
29. For the past 9 years,
%
i = 84 = 2%; PMT = $2000; n = 9; c = 4 = 4; and
1
i2 = (1 + i ) c − 1 = (1.02) 4 – 1 = 0.082432160
The current value of Gloria's RRSP is (1 + i ) n − 1
FV = PMT i 1.08243216 9 − 1 = $2000 0.08243216 – 1 = $25,230.137
For the next 15 years, PMT = $2000; n = 30;
i = 2%; c = 4 = 2; PV = $25,230.137;
2 and i2 = (1 + i ) c − 1 = (1.02) 2 – 1 = 0.0404
The total amount 15 years from now will be 1.0404 30 − 1 60 $25,230.137 (1.02) + $2000 0.0404 = $195,703.17 74 8 I/Y P/Y 1 ENTER C/Y 4 ENTER 9 N
0 PV 2000 + / – PMT
CPT FV Ans: 25,230.137 Same I/Y, PMT P/Y 2 ENTER C/Y 4 ENTER 30 N 25230.137 + / – PV CPT FV Ans: 195,703.17 Business Mathematics in Canada, 7/e Exercise 10.5 (continued)
31. Cost to purchase the annuity = PV of all payments
Fi...

View Full
Document