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a)
PV
i
N
FV
50000
6% APR
7 years
??
$75,181.51
b)
PV
i
N
m
FV
50000
6% APR
7 years
52
periodic rate
number of periods
??
$76,079.66
c)
PV
i
N
m
FV
50000
6% APR
7 years
cont
??
$ 76,098.08
2)
PV
i
N
FV
20,000.00
7.50% APR
4 Years
??
$26,709.38
b)
PV
i
N
m
FV
20,000.00
7.50% APR
4 Years
365
??
$26,996.34
periodic rate
number of periods
$76,079.66
2)
a. You are thinking of borrow
rate of 7.5% to buy a new c
to repay in 4 years?
$26,996.34
Pv
100
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
0%
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
6%
$100.00
$106.00
$112.36
$119.10
$126.25
$133.82
$141.85
$150.36
$159.38
$168.95
$179.08
$189.83
$201.22
$213.29
$226.09
$239.66
$254.04
$269.28
$285.43
$302.56
$320.71
$339.96
$360.35
$381.97
$404.89
$429.19
$454.94
$482.23
$511.17
$541.84
$574.35
12%
$100.00
$112.00
$125.44
$140.49
$157.35
$176.23
$197.38
$221.07
$247.60
$277.31
$310.58
$347.85
$389.60
$436.35
$488.71
$547.36
$613.04
$686.60
$769.00
$861.28
$964.63
$1,080.38
$1,210.03
$1,355.23
$1,517.86
$1,700.01
$1,904.01
$2,132.49
$2,388.39
$2,674.99
$2,995.99
F
$4,000.00
$3,000.00
$2,000.00
$1,000.00
$0.00
0
10
15
Years
FV
0%
6%
12%
10
15
Years
20
25
30
35
1)
FV
N
i
PV
67,000.00
10
9%
??
$28,301.52
b)
FV
N
i
m
PV
67,000.00
10
9%
4
??
$27,513.27
c)
FV
N
i
m
PV
67,000.00
10
9%
cont
??
27,240.17
2)
PV
i
FV
N
??
5.50%
80,000.00
6.00
$58,019.67
b)
PV
i
FV
N
m
??
5.50%
80,000.00
6
12
$57,557.28
c)
PV
i
FV
N
m
??
5.50%
80,000.00
6
cont
$
3)
FV
N
i
PV
57,513.90
100,000.00
20
7%
??
$25,841.90
1)
a. What is the maximum you would pa
pay you back $67,000 in 10 year if you
2)
a. How much can you borrow today at 5
repay $80,000 in 6 years?
b. How much can you borrow if the 5.5%
c. How much can you borrow if the 5.5%
3)
20 years ago your parents opene
name earning 7% APR. The accou
today. How much was your paren
FV
100
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
0%
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
$100.00
6%
$100.00
$94.34
$89.00
$83.96
$79.21
$74.73
$70.50
$66.51
$62.74
$59.19
$55.84
$52.68
$49.70
$46.88
$44.23
$41.73
$39.36
$37.14
$35.03
$33.05
$31.18
$29.42
$27.75
$26.18
$24.70
$23.30
$21.98
$20.74
$19.56
$18.46
$17.41
12%
$100.00
$89.29
$79.72
$71.18
$63.55
$56.74
$50.66
$45.23
$40.39
$36.06
$32.20
$28.75
$25.67
$22.92
$20.46
$18.27
$16.31
$14.56
$13.00
$11.61
$10.37
$9.26
$8.26
$7.38
$6.59
$5.88
$5.25
$4.69
$4.19
$3.74
$3.34
$120.00
$100.00
$80.00
$60.00
$40.00
$20.00
$0.00
0
10
1)
a. What is the Present value of $100 to be rec
interest rate is:
0%, 6%, 12%
0.00
0.00
0.00
0%
0.00
6%
12%
0.00
0.00
0.00
0
10
15
20
25
30
35
a)
PV
b)
FV
N
i
PV
c)
FV
N
i
PV
207,000
261,920.00
6
4%
$206,999
358,457.00
14
4%
$207,000
Alternative
a)
PV
N
i
207000
14
4%
FV(14)
$358,457
b)
PV
N
i
261920
8
4%
FV(14)
c)
FV(14)
$358,456
358,457
monthly
1)
FV
N
PV
i
120,000.00
15 years
50,000.00
??
6.01%
b)
FV
N
PV
m
i
120,000.00
15 years
50,000.00
365
??
0.0160% per day
5.84% APR
2)
PV
FV
N
i
1
2
16
??
4.43% APR
b)
PV
FV
N
m
i
1
2
16
12
??
APR
0.36% per month
4.34% APR
3)
PV
FV
N
20,000.00
30,000.00
5
??
APR
8.45%
b)
PV
FV
N
m
i
20,000.00
30,000.00
5
365
??
APR
0.02% per day
8.11% APR
1)
a. You are considering the purchase of an investm
will pay you $120,000 in 15 years. This investmen
you $50,000 today. What rate of return is this inve
promising you?
b. Rework part (a) if this investment is promising
return that is daily compounded.
2)
a. At what rate of return would you be able to do
money in 16 years?
3)
a. Your bank agreed to loan you $20,000 today in
return for a repayment of $30,000 in 5 years?
What interest rate is your bank charging you?
1)
a
FV
PV
i
N
1,000,000.00
200,000.00
12%
??
years
14.20 years
b)
FV
PV
i
m
N
1,000,000.00
200,000.00
12%
2
??
years
27.62 semiannual periods
13.81 years
1)
a. How long would it take for you t
you invest $200,000 today at 12%?
1)
FV
N
PMT
i
??
8
1,000.00
5%
FVA
b)
FV
N
PMT
i
Type
$9,549.11
??
8
1,000.00
5%
due
$10,026.56
2)
i
PV
N
FV
5%
$9,549.11
6
??
$12,796.72
3)
PV
PMT
N
i
FV
3,000.00
1,000.00
8
5%
??
($13,981.48)
4)
N
m
PMT
i
FV
3
12
200
4% APR
$13,981.48
Number of periods
periodic rate
36
0.00333333
??
$7,636.31
$7,636.31
b)
N
m
PMT
i
Type
3
12
200
4% APR
Number of periods
periodic rate
36
0.00333333
due
$7,661.77
1)
a. How much will you have in your sa
if you make annual deposits of $1000
5%?
culate FVAD
months
per month
4)
a. How much will you have in your sav
if you make monthly deposits of $200
account?
months
per month
1)
i
PV
N
PMT
9%
??
5
100
$388.97
2)
PV
PMT
N
i
Type
??
100
5
9%
due
$423.97
3)
i
PV
N
PMT
FV
9%
??
5
100
150
($486.45)
$486.45
1)
At an interest rate of 9%, what is the m
today if you want to payoff your loan in
2)
How much do you have to invest today
$100 each year for 5 years starting toda
9% on your investment?
3)
At an interest rate of 9%, what is the m
today, if you want to payoff your loan in
addition to a lump sum of $150 at the e
payment)?
1)
PV
2)
i
PMT
N
50,000.00
FV in year 6
$79,343.72
Values in year 6
1)
PV
N
i
8%
11000
6
Value in year 6
PV
3)
FV
N
i
50,851.68
$80,695.22
2)
PMT
N
i
100,000.00
10
8%
Value in year 6
PV
4)
PMT
N
FV
i
PV
46,319.35
$73,502.99
3)
FV
N
i
11,000.00
4
20,000.00
8%
51,133.99
Value in year 6
$81,143.22
4)
two steps
Step 1 find value in year 4
PMT
N
i
FV
Value in year 4
Step 2
find FV of step 1 in year 6
Value in year 6
N
i
2)
PMT
i
N
PV
40,000.00
6%
10
??
$294,403.48
alues in year 6
1)
If your opportunity cost is 8
cash inflows would you pre
50000
6
8%
alue in year 6
$79,343.72
1.
2.
3.
4.
$50,000 today
$ 11,000 each year for
$100,000 in 10 years
$11,000 each year for 4
11000
6
8%
alue in year 6
$80,695.22
100,000.00
4
8%
alue in year 6
$73,502.99
alue in year 4
$69,567.23
nd FV of step 1 in year 6
alue in year 6
2
8%
$81,143.22
2)
You won a $400,000 competition.
will pay it over 10 years annual pa
is 6%, how much is your prize wor
2)
You won a $400,000 competition.
will pay it over 10 years annual pa
is 6%, how much is your prize wor
1)
If your opportunity cost is 8%, which one of the following alternative
cash inflows would you prefer?
1.
2.
3.
4.
$50,000 today
$ 11,000 each year for 6 years
$100,000 in 10 years
$11,000 each year for 4 years and $20,000 at the end of 4 years
1)
PV
N
i
PMT
28,000.00
8
3.40%
??
$4,056.36
b)
PV
N
i
PMT
Type
28,000.00
8
3.40%
??
due
$3,922.98
c)
PV
N
i
PMT
m
2)
PV
i
N
FV
PMT
28,000.00
8
3.40%
??
12
30,000.00
6%
20
1,000,000.00
??
$24,569.02
number of payments
monthly rate
1)
a. You owe $28,000 i
to pay it off over the
equal payments. Wha
payment if the rate o
96 monthly
0.002833
$333.54
2)
You want to start sa
You already have $3
that earns 6%. How
this account each ye
order to retiree a mi
1)
a. You owe $28,000 is student loans and want
to pay it off over the next 8 years in annual
equal payments. What is the size of each
payment if the rate on student loans is 3.4%
2)
You want to start saving for your retirement.
You already have $30,000 saved in an account
that earns 6%. How much should you add to
this account each year for the next 20 years in
order to retiree a millionaire?
1)
FV
m
N*m
PMT
I
??
15000
12
36 monthly deposits
400
APR
0.232% monthly rate
2.78% APR
2)
PV
PMT
N
i
9,000.00
2,000.00
11
??
APR
18.92%
3)
i
PV
PMT
m
N
??
APR
9000
200
12
7
Number of payments
84
1)
You want to save $15,000 for a
house. You will make 36 monthl
saving account. What rate must
account to accomplish your goa
2)
Calculate the rate of return on
cost you $9,000 today and re
for the next 11 years.
monthly
3)
Find the rate of return on an in
you $9,000 today and return $
years.
1)
N
PMT
PV
i
??
1,000.00
5,000.00
6%
6.12
b)
N
PMT
PV
i
Type
??
1,000.00
5,000.00
6%
due
5.71
2)
PV
m
PMT
i
N*m
4500
12
210
18% APR
monthly rate
0.015
??
26.04444 monthly payments
b)
N
??
years
2.1703698 years
1)
a. How many annual paym
make in order to pay off a
2)
a. How many payments do you hav
pay off your credit card debt of $4,
monthly payments of $210 and the
18%?
1)
delayed
20
$1,729,203.33
$1,729,203.33
19
4%
??
$62,491.02
c)
o/s balance is PV of remaining payments
remaining payments
2
PV
$188,609.47
Alternative
PV(0)
$820,753.26
N
19
i
4%
PMT
??
$62,491.02
you have to pay each year (rather than a lump sum to day)
ve your retirement goal if the last deposit will be made a
retire?
PV
i
N
60,000.00
2.35% APR
11
a) PMT
$6,253.38
period
1
2
3
4
5
6
7
8
9
10
11
Beginning balance
PMT
60,000.00
55,156.62
50,199.42
45,125.73
39,932.81
34,617.85
29,177.99
23,610.30
17,911.76
12,079.31
6,109.80
$6,253.38
$6,253.38
$6,253.38
$6,253.38
$6,253.38
$6,253.38
$6,253.38
$6,253.38
$6,253.38
$6,253.38
$6,253.38
Interest portion
1,410.00
1,296.18
1,179.69
1,060.45
938.42
813.52
685.68
554.84
420.93
283.86
143.58
Principle portion
Ending balance
$4,843.38
55,156.62
$4,957.20
50,199.42
$5,073.69
45,125.73
$5,192.92
39,932.81
$5,314.96
34,617.85
$5,439.86
29,177.99
$5,567.70
23,610.30
$5,698.54
17,911.76
$5,832.45
12,079.31
$5,969.51
6,109.80
$6,109.80
-
b
Interest
IPMT
c
principle
PPMT
4
1,060.45
3
$5,073.69
d
o/s balance after
number of remaining PMTs
PV of remaining payments
maining PMTs
ng payments
6
5
29,177.99
price
D.P.
rate
Years
160,000.00
15%
6% APR
30
Number of payments
Monthly rate
PV (loan)
360
0.005
136,000.00
Monthly payment
period
$815.39
Beginning balance
PMT
1
136,000.00
2
135,864.61
3
135,728.55
4
135,591.80
5
135,454.37
6
135,316.25
7
135,177.45
8
135,037.94
9
134,897.75
10
134,756.85
11
134,615.24
12
134,472.93
13
134,329.90
14
134,186.16
15
134,041.71
16
133,896.53
17
133,750.62
18
133,603.99
19
133,456.62
20
133,308.51
21
133,159.66
22
133,010.07
23
132,859.74
24
132,708.65
25
132,556.80
26
132,404.20
27
132,250.83
28
132,096.69
29
131,941.79
30
131,786.11
31
131,629.65
32
131,472.41
33
131,314.38
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
131,155.57
130,995.96
130,835.55
130,674.34
130,512.32
130,349.49
130,185.85
130,021.39
129,856.11
129,690.00
129,523.06
129,355.29
129,186.68
129,017.22
128,846.92
128,675.76
128,503.75
128,330.88
128,157.15
127,982.55
127,807.07
127,630.72
127,453.48
127,275.36
127,096.35
126,916.44
126,735.64
126,553.93
126,371.31
126,187.77
126,003.32
125,817.95
125,631.65
125,444.42
125,256.26
125,067.15
124,877.10
124,686.09
124,494.13
124,301.22
124,107.33
123,912.48
123,716.66
123,519.85
123,322.06
123,123.28
122,923.51
122,722.74
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
122,520.96
122,318.18
122,114.38
121,909.56
121,703.72
121,496.85
121,288.95
121,080.01
120,870.02
120,658.98
120,446.88
120,233.73
120,019.51
119,804.22
119,587.85
119,370.40
119,151.86
118,932.24
118,711.51
118,489.68
118,266.74
118,042.68
117,817.51
117,591.21
117,363.77
117,135.20
116,905.49
116,674.63
116,442.61
116,209.44
115,975.10
115,739.58
115,502.89
115,265.02
115,025.95
114,785.69
114,544.23
114,301.57
114,057.69
113,812.59
113,566.26
113,318.70
113,069.91
112,819.87
112,568.58
112,316.03
112,062.22
111,807.15
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
111,550.79
111,293.16
111,034.24
110,774.02
110,512.50
110,249.67
109,985.53
109,720.07
109,453.28
109,185.16
108,915.70
108,644.89
108,372.72
108,099.20
107,824.31
107,548.04
107,270.39
106,991.35
106,710.92
106,429.09
106,145.85
105,861.19
105,575.10
105,287.59
104,998.64
104,708.24
104,416.40
104,123.09
103,828.32
103,532.07
103,234.34
102,935.12
102,634.41
102,332.19
102,028.47
101,723.22
101,416.45
101,108.14
100,798.29
100,486.89
100,173.94
99,859.42
99,543.33
99,225.66
98,906.40
98,585.54
98,263.08
97,939.01
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
97,613.31
97,285.99
96,957.03
96,626.43
96,294.17
95,960.25
95,624.67
95,287.40
94,948.45
94,607.80
94,265.45
93,921.39
93,575.61
93,228.10
92,878.85
92,527.86
92,175.11
91,820.59
91,464.31
91,106.24
90,746.38
90,384.73
90,021.26
89,655.98
89,288.87
88,919.93
88,549.14
88,176.49
87,801.99
87,425.61
87,047.35
86,667.20
86,285.14
85,901.18
85,515.30
85,127.49
84,737.73
84,346.03
83,952.38
83,556.75
83,159.14
82,759.55
82,357.96
81,954.36
81,548.74
81,141.10
80,731.42
80,319.68
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
251
252
253
254
255
256
257
258
259
260
261
262
263
264
265
266
267
268
269
270
271
272
273
79,905.89
79,490.03
79,072.10
78,652.07
78,229.94
77,805.70
77,379.34
76,950.85
76,520.21
76,087.43
75,652.47
75,215.35
74,776.04
74,334.53
73,890.81
73,444.88
72,996.71
72,546.31
72,093.65
71,638.73
71,181.54
70,722.05
70,260.28
69,796.19
69,329.78
68,861.04
68,389.96
67,916.52
67,440.71
66,962.53
66,481.95
65,998.97
65,513.58
65,025.76
64,535.50
64,042.79
63,547.61
63,049.96
62,549.82
62,047.18
61,542.03
61,034.35
60,524.13
60,011.37
59,496.03
58,978.13
58,457.63
57,934.53
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
274
275
276
277
278
279
280
281
282
283
284
285
286
287
288
289
290
291
292
293
294
295
296
297
298
299
300
301
302
303
304
305
306
307
308
309
310
311
312
313
314
315
316
317
318
319
320
321
57,408.81
56,880.47
56,349.48
55,815.84
55,279.53
54,740.54
54,198.85
53,654.46
53,107.34
52,557.49
52,004.89
51,449.52
50,891.38
50,330.45
49,766.71
49,200.16
48,630.77
48,058.54
47,483.44
46,905.47
46,324.61
45,740.84
45,154.16
44,564.54
43,971.97
43,376.44
42,777.94
42,176.44
41,571.93
40,964.40
40,353.84
39,740.22
39,123.53
38,503.76
37,880.89
37,254.90
36,625.79
35,993.53
35,358.11
34,719.51
34,077.72
33,432.72
32,784.49
32,133.03
31,478.30
30,820.31
30,159.02
29,494.43
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
322
323
324
325
326
327
328
329
330
331
332
333
334
335
336
337
338
339
340
341
342
343
344
345
346
347
348
349
350
351
352
353
354
355
356
357
358
359
360
28,826.51
28,155.25
27,480.64
26,802.66
26,121.28
25,436.50
24,748.29
24,056.64
23,361.54
22,662.96
21,960.88
21,255.30
20,546.19
19,833.53
19,117.31
18,397.51
17,674.11
16,947.09
16,216.43
15,482.13
14,744.15
14,002.48
13,257.10
12,508.00
11,755.15
10,998.54
10,238.14
9,473.95
8,705.93
7,934.07
7,158.35
6,378.75
5,595.26
4,807.85
4,016.50
3,221.19
2,421.91
1,618.63
811.33
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
$815.39
Interest portion
680.00
679.32
678.64
677.96
677.27
676.58
675.89
675.19
674.49
673.78
673.08
672.36
671.65
670.93
670.21
669.48
668.75
668.02
667.28
666.54
665.80
665.05
664.30
663.54
662.78
662.02
661.25
660.48
659.71
658.93
658.15
657.36
656.57
Principle portion
Ending balance
$135.39
135,864.61
$136.07
135,728.55
$136.75
135,591.80
$137.43
135,454.37
$138.12
135,316.25
$138.81
135,177.45
$139.50
135,037.94
$140.20
134,897.75
$140.90
134,756.85
$141.60
134,615.24
$142.31
134,472.93
$143.02
134,329.90
$143.74
134,186.16
$144.46
134,041.71
$145.18
133,896.53
$145.91
133,750.62
$146.64
133,603.99
$147.37
133,456.62
$148.11
133,308.51
$148.85
133,159.66
$149.59
133,010.07
$150.34
132,859.74
$151.09
132,708.65
$151.85
132,556.80
$152.60
132,404.20
$153.37
132,250.83
$154.13
132,096.69
$154.91
131,941.79
$155.68
131,786.11
$156.46
131,629.65
$157.24
131,472.41
$158.03
131,314.38
$158.82
131,155.57
655.78
654.98
654.18
653.37
652.56
651.75
650.93
650.11
649.28
648.45
647.62
646.78
645.93
645.09
644.23
643.38
642.52
641.65
640.79
639.91
639.04
638.15
637.27
636.38
635.48
634.58
633.68
632.77
631.86
630.94
630.02
629.09
628.16
627.22
626.28
625.34
624.39
623.43
622.47
621.51
620.54
619.56
618.58
617.60
616.61
615.62
614.62
613.61
$159.61
$160.41
$161.21
$162.02
$162.83
$163.64
$164.46
$165.28
$166.11
$166.94
$167.77
$168.61
$169.46
$170.30
$171.15
$172.01
$172.87
$173.73
$174.60
$175.48
$176.35
$177.24
$178.12
$179.01
$179.91
$180.81
$181.71
$182.62
$183.53
$184.45
$185.37
$186.30
$187.23
$188.17
$189.11
$190.05
$191.00
$191.96
$192.92
$193.88
$194.85
$195.83
$196.81
$197.79
$198.78
$199.77
$200.77
$201.78
130,995.96
130,835.55
130,674.34
130,512.32
130,349.49
130,185.85
130,021.39
129,856.11
129,690.00
129,523.06
129,355.29
129,186.68
129,017.22
128,846.92
128,675.76
128,503.75
128,330.88
128,157.15
127,982.55
127,807.07
127,630.72
127,453.48
127,275.36
127,096.35
126,916.44
126,735.64
126,553.93
126,371.31
126,187.77
126,003.32
125,817.95
125,631.65
125,444.42
125,256.26
125,067.15
124,877.10
124,686.09
124,494.13
124,301.22
124,107.33
123,912.48
123,716.66
123,519.85
123,322.06
123,123.28
122,923.51
122,722.74
122,520.96
612.60
611.59
610.57
609.55
608.52
607.48
606.44
605.40
604.35
603.29
602.23
601.17
600.10
599.02
597.94
596.85
595.76
594.66
593.56
592.45
591.33
590.21
589.09
587.96
586.82
585.68
584.53
583.37
582.21
581.05
579.88
578.70
577.51
576.33
575.13
573.93
572.72
571.51
570.29
569.06
567.83
566.59
565.35
564.10
562.84
561.58
560.31
559.04
$202.78
$203.80
$204.82
$205.84
$206.87
$207.90
$208.94
$209.99
$211.04
$212.09
$213.15
$214.22
$215.29
$216.37
$217.45
$218.54
$219.63
$220.73
$221.83
$222.94
$224.06
$225.18
$226.30
$227.43
$228.57
$229.71
$230.86
$232.02
$233.18
$234.34
$235.51
$236.69
$237.87
$239.06
$240.26
$241.46
$242.67
$243.88
$245.10
$246.33
$247.56
$248.80
$250.04
$251.29
$252.55
$253.81
$255.08
$256.35
122,318.18
122,114.38
121,909.56
121,703.72
121,496.85
121,288.95
121,080.01
120,870.02
120,658.98
120,446.88
120,233.73
120,019.51
119,804.22
119,587.85
119,370.40
119,151.86
118,932.24
118,711.51
118,489.68
118,266.74
118,042.68
117,817.51
117,591.21
117,363.77
117,135.20
116,905.49
116,674.63
116,442.61
116,209.44
115,975.10
115,739.58
115,502.89
115,265.02
115,025.95
114,785.69
114,544.23
114,301.57
114,057.69
113,812.59
113,566.26
113,318.70
113,069.91
112,819.87
112,568.58
112,316.03
112,062.22
111,807.15
111,550.79
557.75
556.47
555.17
553.87
552.56
551.25
549.93
548.60
547.27
545.93
544.58
543.22
541.86
540.50
539.12
537.74
536.35
534.96
533.55
532.15
530.73
529.31
527.88
526.44
524.99
523.54
522.08
520.62
519.14
517.66
516.17
514.68
513.17
511.66
510.14
508.62
507.08
505.54
503.99
502.43
500.87
499.30
497.72
496.13
494.53
492.93
491.32
489.70
$257.63
$258.92
$260.22
$261.52
$262.83
$264.14
$265.46
$266.79
$268.12
$269.46
$270.81
$272.16
$273.53
$274.89
$276.27
$277.65
$279.04
$280.43
$281.83
$283.24
$284.66
$286.08
$287.51
$288.95
$290.40
$291.85
$293.31
$294.77
$296.25
$297.73
$299.22
$300.71
$302.22
$303.73
$305.25
$306.77
$308.31
$309.85
$311.40
$312.95
$314.52
$316.09
$317.67
$319.26
$320.86
$322.46
$324.07
$325.69
111,293.16
111,034.24
110,774.02
110,512.50
110,249.67
109,985.53
109,720.07
109,453.28
109,185.16
108,915.70
108,644.89
108,372.72
108,099.20
107,824.31
107,548.04
107,270.39
106,991.35
106,710.92
106,429.09
106,145.85
105,861.19
105,575.10
105,287.59
104,998.64
104,708.24
104,416.40
104,123.09
103,828.32
103,532.07
103,234.34
102,935.12
102,634.41
102,332.19
102,028.47
101,723.22
101,416.45
101,108.14
100,798.29
100,486.89
100,173.94
99,859.42
99,543.33
99,225.66
98,906.40
98,585.54
98,263.08
97,939.01
97,613.31
488.07
486.43
484.79
483.13
481.47
479.80
478.12
476.44
474.74
473.04
471.33
469.61
467.88
466.14
464.39
462.64
460.88
459.10
457.32
455.53
453.73
451.92
450.11
448.28
446.44
444.60
442.75
440.88
439.01
437.13
435.24
433.34
431.43
429.51
427.58
425.64
423.69
421.73
419.76
417.78
415.80
413.80
411.79
409.77
407.74
405.71
403.66
401.60
$327.32
$328.96
$330.60
$332.26
$333.92
$335.59
$337.27
$338.95
$340.65
$342.35
$344.06
$345.78
$347.51
$349.25
$350.99
$352.75
$354.51
$356.29
$358.07
$359.86
$361.66
$363.47
$365.28
$367.11
$368.94
$370.79
$372.64
$374.51
$376.38
$378.26
$380.15
$382.05
$383.96
$385.88
$387.81
$389.75
$391.70
$393.66
$395.63
$397.60
$399.59
$401.59
$403.60
$405.62
$407.64
$409.68
$411.73
$413.79
97,285.99
96,957.03
96,626.43
96,294.17
95,960.25
95,624.67
95,287.40
94,948.45
94,607.80
94,265.45
93,921.39
93,575.61
93,228.10
92,878.85
92,527.86
92,175.11
91,820.59
91,464.31
91,106.24
90,746.38
90,384.73
90,021.26
89,655.98
89,288.87
88,919.93
88,549.14
88,176.49
87,801.99
87,425.61
87,047.35
86,667.20
86,285.14
85,901.18
85,515.30
85,127.49
84,737.73
84,346.03
83,952.38
83,556.75
83,159.14
82,759.55
82,357.96
81,954.36
81,548.74
81,141.10
80,731.42
80,319.68
79,905.89
399.53
397.45
395.36
393.26
391.15
389.03
386.90
384.75
382.60
380.44
378.26
376.08
373.88
371.67
369.45
367.22
364.98
362.73
360.47
358.19
355.91
353.61
351.30
348.98
346.65
344.31
341.95
339.58
337.20
334.81
332.41
329.99
327.57
325.13
322.68
320.21
317.74
315.25
312.75
310.24
307.71
305.17
302.62
300.06
297.48
294.89
292.29
289.67
$415.86
$417.94
$420.03
$422.13
$424.24
$426.36
$428.49
$430.63
$432.79
$434.95
$437.13
$439.31
$441.51
$443.72
$445.93
$448.16
$450.41
$452.66
$454.92
$457.20
$459.48
$461.78
$464.09
$466.41
$468.74
$471.08
$473.44
$475.81
$478.19
$480.58
$482.98
$485.39
$487.82
$490.26
$492.71
$495.17
$497.65
$500.14
$502.64
$505.15
$507.68
$510.22
$512.77
$515.33
$517.91
$520.50
$523.10
$525.72
79,490.03
79,072.10
78,652.07
78,229.94
77,805.70
77,379.34
76,950.85
76,520.21
76,087.43
75,652.47
75,215.35
74,776.04
74,334.53
73,890.81
73,444.88
72,996.71
72,546.31
72,093.65
71,638.73
71,181.54
70,722.05
70,260.28
69,796.19
69,329.78
68,861.04
68,389.96
67,916.52
67,440.71
66,962.53
66,481.95
65,998.97
65,513.58
65,025.76
64,535.50
64,042.79
63,547.61
63,049.96
62,549.82
62,047.18
61,542.03
61,034.35
60,524.13
60,011.37
59,496.03
58,978.13
58,457.63
57,934.53
57,408.81
287.04
284.40
281.75
279.08
276.40
273.70
270.99
268.27
265.54
262.79
260.02
257.25
254.46
251.65
248.83
246.00
243.15
240.29
237.42
234.53
231.62
228.70
225.77
222.82
219.86
216.88
213.89
210.88
207.86
204.82
201.77
198.70
195.62
192.52
189.40
186.27
183.13
179.97
176.79
173.60
170.39
167.16
163.92
160.67
157.39
154.10
150.80
147.47
$528.34
$530.99
$533.64
$536.31
$538.99
$541.69
$544.39
$547.12
$549.85
$552.60
$555.36
$558.14
$560.93
$563.74
$566.56
$569.39
$572.23
$575.10
$577.97
$580.86
$583.77
$586.68
$589.62
$592.57
$595.53
$598.51
$601.50
$604.51
$607.53
$610.57
$613.62
$616.69
$619.77
$622.87
$625.98
$629.11
$632.26
$635.42
$638.60
$641.79
$645.00
$648.23
$651.47
$654.72
$658.00
$661.29
$664.59
$667.92
56,880.47
56,349.48
55,815.84
55,279.53
54,740.54
54,198.85
53,654.46
53,107.34
52,557.49
52,004.89
51,449.52
50,891.38
50,330.45
49,766.71
49,200.16
48,630.77
48,058.54
47,483.44
46,905.47
46,324.61
45,740.84
45,154.16
44,564.54
43,971.97
43,376.44
42,777.94
42,176.44
41,571.93
40,964.40
40,353.84
39,740.22
39,123.53
38,503.76
37,880.89
37,254.90
36,625.79
35,993.53
35,358.11
34,719.51
34,077.72
33,432.72
32,784.49
32,133.03
31,478.30
30,820.31
30,159.02
29,494.43
28,826.51
144.13
140.78
137.40
134.01
130.61
127.18
123.74
120.28
116.81
113.31
109.80
106.28
102.73
99.17
95.59
91.99
88.37
84.74
81.08
77.41
73.72
70.01
66.29
62.54
58.78
54.99
51.19
47.37
43.53
39.67
35.79
31.89
27.98
24.04
20.08
16.11
12.11
8.09
4.06
$671.26
$674.61
$677.99
$681.38
$684.78
$688.21
$691.65
$695.11
$698.58
$702.07
$705.58
$709.11
$712.66
$716.22
$719.80
$723.40
$727.02
$730.65
$734.31
$737.98
$741.67
$745.38
$749.10
$752.85
$756.61
$760.40
$764.20
$768.02
$771.86
$775.72
$779.60
$783.49
$787.41
$791.35
$795.31
$799.28
$803.28
$807.30
$811.33
28,155.25
27,480.64
26,802.66
26,121.28
25,436.50
24,748.29
24,056.64
23,361.54
22,662.96
21,960.88
21,255.30
20,546.19
19,833.53
19,117.31
18,397.51
17,674.11
16,947.09
16,216.43
15,482.13
14,744.15
14,002.48
13,257.10
12,508.00
11,755.15
10,998.54
10,238.14
9,473.95
8,705.93
7,934.07
7,158.35
6,378.75
5,595.26
4,807.85
4,016.50
3,221.19
2,421.91
1,618.63
811.33
0.00
ng a house that costs $160,000. You will put down 15% and finance the
30 years at 6% with monthly payments.
c)
Principle
PPMT
70
$191.00
d)
Interest
IPMT
89
$605.40
e)
o/s balance after
after
remaining payments
PV of remaining
10 years
120 payments
240
$113,812.59
113,812.59
1)
PMT
i
PVP
12,000.00
6%
200,000.00
b)
PMT12
i
PVP(11)
12000
6%
200,000.00
c)
PMT1
g
i
PVGP
12000
2%
6%
300,000.00
d)
delayed perpetuity
200,000.00
$133,011.42
e)
delayed growing perpetuity
PMT(8)
12,000.00
g
2.50%
i
6%
step 1 - find PVGP(7)
PVGP(7)
$ 342,857.14
2)
i
PVP
PMT
$228,019.58
??
1,000,000.00
20,000.00
3)
PVP
i
PMT
PMT
2.00%
100,000.00
8%
??
8,000.00
1)
You want to establish an endowment to allow your favorite charity
to withdraw $12,000 each year in a perpetuity. You found an
investment that will pay you 6% indefinitely.
a. How much do you have to deposit today to achieve this goal?
b. How much will you have in this account in 11 years.
c. How much do you have to invest today if you want the charity
to withdraw $12,000 next year and have this amount grow at 2%
in a perpetuity.
d. How much do you have to deposit today if you want the charity
to be able to withdraw $12,000 a year in a perpetuity with the first
withdrawal being in 8 years?
e. How much do you have to deposit today if you want the charity
to be able to withdraw $12,000 starting in year 8 and have this
amount grow by 2.5% indefinitely?
2)
What is your rate of return on an investment of $1,000,0
that will pay back $20,000 in a perpetuity.
3)
You paid $100,000 for a consol (perpetuity) that will earn
How much you get back each year?
1 years.
vestment of $1,000,000
petuity.
i
year
5%
cash
PV(0)
1 10,000.00
$9,523.81
2 20,000.00
$18,140.59
3
5,000.00
$4,319.19
4 15,000.00
$12,340.54
5
3,000.00
$2,350.58
PV(0)
2)
i
year
3)
i
year
$46,674.70
using NPV
$46,674.70
5%
0
1
2
3
4
5
PV(0)
Total
cash
2,000.00
10,000.00
20,000.00
5,000.00
15,000.00
3,000.00
using NPV
$48,674.70
5%
cash
N
1 10,000.00
2 20,000.00
3
5,000.00
4 15,000.00
5
3,000.00
FV(5)
4
3
2
1
0
Total FV
Alternative
Step 1 - find PV(0) using NPV function
PV(0)
$46,674.70
Step 2 - Find FV(5) for lump sum found in step 1
PV
$46,674.70
N
5
i
5%
$12,155.06
$23,152.50
$5,512.50
$15,750.00
$3,000.00
$59,570.06
FV(5)
b)
i
year
??
$59,570.06
5%
cash
1 10,000.00
2 20,000.00
3
5,000.00
4 15,000.00
5
3,000.00
Total FV
Alternative
Step 1 - find PV(0) using NPV function
PV(0)
$46,674.70
Step 2 - Find FV(11) for lump sum found in step 1
PV
$46,674.70
N
11
i
5%
FV(5)
??
$79,829.58
1) How much w
following cash
3)
a. How much would you end up with in your sav
of 5 years if you can earn 5% on the following d
$59,570.06
1) How much would you pay for an investment that will return the
following cash flows, assuming an opportunity cost of 5%?
year
cash
1
10000
2
20000
3
5000
4
15000
5
3000
year
1
2
3
4
5
cash
10000
20000
5000
15000
3000
cash
1
10000
2
20000
3
5000
4
15000
5
3000
year
cash
0
-40000
1
10000
2
20000
3
5000
4
15000
5
3000
11.62%
11.62%
year
cash
1
10000
2
20000
3
5000
4
15000
5
3000
ou be earning if you
a saving account over
th $60,000?
year
cash
1
10000
2
20000
3
5000
4
15000
5
3000
Bank
rate
1
2
3
4
5
6
7
EAR
1
2
4
12
52
365
4.18%
4.19%
4.20%
4.16%
4.14%
4.12%
4.08%
1)
Which of the following banks would you rather invest in and why?
Bank
rate
1
2
3
4
5
6
7
4.18%
4.15%
4.14%
4.08%
4.06%
4.04%
4%
2)
You invested $10,000 in an investment that earns monthly retu
your investment is expected to double in 10 years.
a) Calculate your annual rate of return
b) Calculate the EAR on your investment
c) What is the periodic rate of return on your investment?
Bank
APR
1
2
3
4
5
6
7
PMT
N
i
m
FV(5)
freq
12.10%
11.90%
11.82%
11.75%
11.60%
11.50%
11.40% cont
1
2
4
12
52
365
10000
5
12%
12
??
WRONG Way
$816,696.70
Correct way
Step 1 - find EAR
EAR
12.68%
Step 2 - find FV(5) using EAR and number of years
FV(5)
$64,395.55
EAR
12.10%
12.25%
12.35%
12.40%
12.29%
12.19%
12.08%
64,395.55