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Tutorial Solutions - Chapter 5

The document contains 15 questions with input and output areas related to calculating future and present values using simple and compound interest formulas. A variety of interest rates, time periods, and dollar amounts are provided in the input areas and corresponding future and present values are displayed in the output areas based on the compound interest calculation. The questions cover topics such as the difference between simple and compound interest, using formulas to calculate interest rates or time periods, and applying the compound interest calculation over multiple time periods.

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alisha Harding
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70 views13 pages

Tutorial Solutions - Chapter 5

The document contains 15 questions with input and output areas related to calculating future and present values using simple and compound interest formulas. A variety of interest rates, time periods, and dollar amounts are provided in the input areas and corresponding future and present values are displayed in the output areas based on the compound interest calculation. The questions cover topics such as the difference between simple and compound interest, using formulas to calculate interest rates or time periods, and applying the compound interest calculation over multiple time periods.

Uploaded by

alisha Harding
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 13

Chapter 5

Question 1

Input area:

Interest rate 7%
Deposit $ 6,000
# of years 9

Output area:

Simple interest
per year $ 420.00
Total simple interest $ 3,780.00

FV with simple interest $ 9,780.00

Compound interest $11,030.76

Difference $ 1,250.76
Chapter 5
Question 2

Input area: Output area:

Present value Years Interest rate Future value


$ 2,250 11 13% $ 8,630.69
$ 8,752 7 9% $ 15,999.00
$ 76,355 14 12% $ 373,155.46
$ 183,796 8 6% $ 292,942.90
Chapter 5
Question 3

Output area: Input area:

Present value Years Interest rate Future value


$ 6,411.62 13 7% $ 15,451
$ 31,620.87 4 13% $ 51,557
$ 19,825.71 29 14% $ 886,073
$ 17,515.89 40 9% $ 550,164
Chapter 5
Question 4

Input area: Output area:

Present value Years Interest rate Future value


$ 240 4 5.47% $ 297
360 18 6.29% 1,080
39,000 19 8.55% 185,382
38,261 25 11.10% 531,618
Chapter 5
Question 5

Input area: Output area:

Present value Years Interest rate Future value


$ 560 10.54 9% $ 1,389
810 8.50 10% 1,821
18,400 17.56 17% 289,715
21,500 21.44 15% 430,258
Chapter 5
Question 6

Input area: Output area:

Present value Years Interest rate Future value Formula:


$ 65,000 18 8.87% $ 300,000 r = (FV / PV)1/t – 1

Calculator:
N = 18
PV = -65,000
FV = 300,000
CPT I/Y
Chapter 5
Question 7

Input area: Output area:

Present value Years Interest rate Future value Formula:


$ 1.00 11.01 6.50% $ 2.00 t = ln(FV / PV) / ln(1 + r)
1.00 22.01 6.50% 4.00

Rule 72?
Chapter 5
Question 8

Input area: Output area:

Present value Years Interest rate Future value


$ 200,300 10 3.53% $ 283,400
Chapter 5
Question 9

Input area: Output area:

Present value Years Interest rate Future value


$ 40,000 33.23 4.80% $ 190,000
Chapter 5
Question 10

Output area: Input area:

Present value Years Interest rate Future value


$154,256,257.63 20 6.80% $ 575,000,000
Chapter 5
Question 11

Output area: Input area:

Present value Years Interest rate Future value


$ 1,013.63 80 9.0% $ 1,000,000
Chapter 5
Question 13

Input area: Output area:

Present value Years Interest rate Future value


$ 150 115 8.24% $ 1,350,000

Present value Years Interest rate Future value


$ 1,350,000 30 8.24% $ 14,520,022.06
Chapter 5
Question 15

Input area: Output area:

Present value Years Interest rate Future value


$ 12,377,500 4 -4.46% $ 10,311,500

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