39. ANSWER = C) 19%
Originally paid amount = $85000
Sold for = $484050
N = 10 years
PV = FV(1 + r)-n
85000 = 484050 * (1 + r) -10
85000 / 484050 = (1+ r)-10
0.175602 = (1+ r)-10
(0.175602)1/-10 = (1+ r)-10/-10
(0.175602)-0.10 = (1+ r)
1.1900 = 1 + r
1.1900 - 1 = r
0.1900 = r or r = 19.00%
40. Answer = a) $5,790
PV = FV * (1+r)-n
= $12500 * ( 1+ 0.08) -10
= $ 12500 * 0.463193
= $ 5790
41. ANSWER = A)24%
Borrowing amount = $ 2000
Monthly instalment = $ 189.12
n = 1 * 12 = 12
PVIFA = $ 2000 / 189.12
= 10.58
Refer to PVIFA Table, we get PVIFA(12) = 10.58 at 2%
Annual interest rate = 2% * 12 = 24 %
or PVIFA = [ 1 - (1+r)-n] / i
= [ 1 - (1 + 0.02)-12] / 0.02 = 10.58
42.
Answer = B)Compound: Annunities involve depositing money at the end of the period and allowing it to grow.
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