Chapter 10 Solution

# 78 same iy py cy same n fv 2000 pmt cpt pv ans

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Unformatted text preview: i ) −n PV = PMT i −20 1 − 1.05 = \$1000 0.05 = \$12,462.21 Similarly, b. For i = 10%, PV = \$8513.56 c. For i = 11%, PV = \$7963.33 d. For i = 15%, PV = \$6259.33 5. Given: i = 8% = 0. 6 %; PMT = \$75, 12 n = 12(2.5) = 30 1 − ( 1 + i ) −n PV = PMT i 1 − 1.00 6 −30 = \$75 0.00 6 = \$2033.16 7. Given: i = 6% = 0.5%; PMT = 12 \$175, n = 12(8.25) = 99 1 − ( 1 + i ) −n PV = PMT i −99 1 − 1.005 = \$175 0.005 = \$13,638.69 5 I/Y P/Y 1 ENTER (making C/Y = P/Y = 1) 20 N 1000 PMT 0 FV CPT PV Ans: –12,462.21 8 I/Y P/Y 12 ENTER (making C/Y = P/Y = 12) 30 N 75 PMT 0 FV CPT PV Ans: –2033.16 6 I/Y P/Y 12 ENTER (making C/Y = P/Y = 12) 99 N 175 PMT 0 FV CPT PV Ans: –13,638.69 The investor would pay \$13,638.69 to purchase the contract. 50 Business Mathematics in Canada, 7/e Exercise 10.3 (continued) 9. Given: i = 9.9% = 4.95%; 2 PMT = \$1240, n = 2(9.5) = 19 9.9 I/Y P/Y 2 ENTER (making C/Y = P/Y = 2) 19 N 1240 + / – PMT 0 FV CPT PV Ans: 15,047.05 1 − ( 1 + i ) −n PV = PMT i 1 − 1.0495 −19 = \$1240 0.0495 = \$15,047.05 The current balance on the loan is \$15,047.05. 11. Given: PMT = \$2000 per year; term = 10 years; j = 7% compounded annually 1 − ( 1 + i ) −n PV = PMT i −10 1 − 1.07 = \$2000 0.07 7 I/Y P/Y 1 ENTER (making C/Y = P/Y = 1) 10 N 2000 PMT 0 FV CPT PV Ans: –14,047.16 = \$14,047.16 13. Given: i = = 4(7) = 28 6% 4 = 1.5%; PMT = \$2500, 1 − ( 1 + i ) −n PV = PMT i −28 1 − 1.015 = \$2500 0.015 6 I/Y P/Y 4 ENTER (making C/Y = P/Y = 4) 28 N 2500 PMT 0 FV CPT PV Ans: –56,816.79 n = \$56,816.79 Exercise 10.3 (continued) 15. Given: Term = 20 years; j = 4.8% compounded monthly; PMT = \$1000 per month Therefore, i = 4.8% = 0.4% and n = 12(20) = 240 12 The amount required to purchase the annuity is its present value. 1 − ( 1 + i ) −n PV = PMT i 4.8 I/Y P/Y 12 ENTER (making C/Y = P/Y = 12) 240 N 1000 PMT 0 FV CPT PV Ans: –154,093.30 Chapter 10: Ordinary Annuities: Future Value and Present Value 51 1 − 1.004 −240 = \$154,093.30 = \$1000 0.004 17. The amoun...
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## This document was uploaded on 02/08/2014.

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