Question

Determine using the following PW relation trial and error & interpolation: PW = -90,000 + 12,000(P/A, A1", 4) +10,000(P/F, A1, 2) + 45,000[P/F, A1,4 Do not include the in your answer. Round to two decimal numbers (g. 15.25). I recommend that the range between the two points positive and negative, 6%, not 2% and 15% since a wide range results in a loss accurate answer less than 5% deg try 2% and

Answer 1

PW = -90000 + 12000 * (P/A, i, 4) + 10000 * (P/F, i, 2) + 45000 * (P/F, i, 4) = 0

12000 * (P/A, i, 4) + 10000 * (P/F, i, 2) + 45000 * (P/F, i, 4) = 90000

Dividing by 10000

1.2 * (P/A, i, 4) + (P/F, i, 2) + 4.5 * (P/F, i, 4) = 9

Using trail and error method

When i = 4%, value of 1.2 * (P/A, i, 4) + (P/F, i, 2) + 4.5 * (P/F, i, 4) = 1.2 * 3.629895 + 0.92456 + 4.5 * 0.854804 = 9.127049

When i = 5%, value of 1.2 * (P/A, i, 4) + (P/F, i, 2) + 4.5 * (P/F, i, 4) = 1.2 * 3.545951 + 0.90703 + 4.5 * 0.822702 = 8.864331

using interpolation

i = 4% + (9.127049 - 9) / (9.127049 - 8.864331) *(5% - 4%)

i = 4% + 0.4836%

i = 4.48%