Homework Answers
Part 1A
| Period | 5 |
| Interest rate per annual | 8% |
| Period | FV factor @8% |
| 1 | 1.08000 |
| 2 | 1.16640 |
| 3 | 1.25971 |
| 4 | 1.36049 |
| 5 | 1.46933 |
| Future value (1.46933*8000) | $ 11,755 |
Part 1B
| Period (5*2) | 10 |
| Interest rate per semi-annual (8%/2) | 4% |
| Period | FV factor @4% |
| 1 | 1.04000 |
| 2 | 1.08160 |
| 3 | 1.12486 |
| 4 | 1.16986 |
| 5 | 1.21665 |
| 6 | 1.26532 |
| 7 | 1.31593 |
| 8 | 1.36857 |
| 9 | 1.42331 |
| 10 | 1.48024 |
| Future value (1.48024*8000) | $ 11,842 |
Part 1C
| Period (5*4) | 20 |
| Interest rate per quarterly (8%/4) | 2% |
| Period | FV factor @2% |
| 1 | 1.02000 |
| 2 | 1.04040 |
| 3 | 1.06121 |
| 4 | 1.08243 |
| 5 | 1.10408 |
| 6 | 1.12616 |
| 7 | 1.14869 |
| 8 | 1.17166 |
| 9 | 1.19509 |
| 10 | 1.21899 |
| 11 | 1.24337 |
| 12 | 1.26824 |
| 13 | 1.29361 |
| 14 | 1.31948 |
| 15 | 1.34587 |
| 16 | 1.37279 |
| 17 | 1.40024 |
| 18 | 1.42825 |
| 19 | 1.45681 |
| 20 | 1.48595 |
| Future value (1.48595*8000) | $ 11,888 |
Part 2A
| Period | 7 |
| Interest rate per annual | 12% |
| Period | PV factor @12% |
| 1 | 0.89286 |
| 2 | 0.79719 |
| 3 | 0.71178 |
| 4 | 0.63552 |
| 5 | 0.56743 |
| 6 | 0.50663 |
| 7 | 0.45235 |
| Present value (0.45235*4500) | $ 2,036 |
Part 2B
| Period (7*2) | 14 |
| Interest rate per semi-annual (12%/2) | 6% |
| Period | PV factor @6% |
| 1 | 0.94340 |
| 2 | 0.89000 |
| 3 | 0.83962 |
| 4 | 0.79209 |
| 5 | 0.74726 |
| 6 | 0.70496 |
| 7 | 0.66506 |
| 8 | 0.62741 |
| 9 | 0.59190 |
| 10 | 0.55839 |
| 11 | 0.52679 |
| 12 | 0.49697 |
| 13 | 0.46884 |
| 14 | 0.44230 |
| Present value (0.44230*4500) | $ 1,990 |
Part 2C
| Period (7*4) | 28 |
| Interest rate per quarterly (12%/4) | 3% |
| Period | PV factor @3% |
| 1 | 0.97087 |
| 2 | 0.94260 |
| 3 | 0.91514 |
| 4 | 0.88849 |
| 5 | 0.86261 |
| 6 | 0.83748 |
| 7 | 0.81309 |
| 8 | 0.78941 |
| 9 | 0.76642 |
| 10 | 0.74409 |
| 11 | 0.72242 |
| 12 | 0.70138 |
| 13 | 0.68095 |
| 14 | 0.66112 |
| 15 | 0.64186 |
| 16 | 0.62317 |
| 17 | 0.60502 |
| 18 | 0.58739 |
| 19 | 0.57029 |
| 20 | 0.55368 |
| 21 | 0.53755 |
| 22 | 0.52189 |
| 23 | 0.50669 |
| 24 | 0.49193 |
| 25 | 0.47761 |
| 26 | 0.46369 |
| 27 | 0.45019 |
| 28 | 0.43708 |
| Present value (0.43708*4500) | $ 1,967 |
Add Answer to:
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