Solution to Financial Management

Chapter 3 1. Present ValueInterest grade function of periodsFuture value 400,0005%5510,512.63 17,4116%3099,999.92 35,00010%20235,462.50 26,981.7516%15249,999.97 FV= PV X (1+r)^n = 400,000 X (1 + 0.05) ^5 = 510, 512.63 = 17,411 X (1 + 0.06)^30 = 99,999.92 = 35,000 X (1 + 0.10) ^ 20= 235,462.50 = 26, 981 X (1 + 0.16)^15 = 249,999.97 12. If 5 old age = 1,000 X ( 1 + 0.08) ^5= 1,469.33 If 10 grades = 1,000 X (1 + 0.08) ^10 = 2,158.92 If 20 years = 1,000 X (1 + 0.08) ^20= 4,660.96 18. Marthas Rate = (65.00/21.00)^1/10 1 = 1.1196-1 = 11.96% Davids Rate = (7.30/3.00)^1/6-1 = 1.1598 -1 = 15.98% 26. waiting date if investing is earning 18% N= In(1,000,000.1,330) / In(1/18) = 6.6226/0.1655 = 40.0121 yrs Waiting time if investment is earning 14% N= In(1,000,000/1,330)/ In(1.14) = 6.6226/0.1310 = 50.5431 yrs Waiting time if investment is earning 10% N= In(1,000,000/1,330)/ In(1.10)= 6.6226/0.953= 69.4845 yrs Chapter 4 4. recrudesc e a. FV = $50 x (1.0725 -1)/0.07 = $50 x 63.2490 = $3,162.45 Part b. FV = $50 x (1.0710 -1)/0.07 = $50 x 13.8164 = $690.82 so the wet day line is $9.18 short of being able to go the medical bill. 6. 5%10%25% Year 1 = 3,0003,1503,3003,750 Year 2 = 5,0002,756.253,0253,906.

25 Year 3 through 7= 0000 Year 8 = 25,00036,936.3953,589.72149,011.61 8. make out = Principal X (1 + rate)^years 25,000 X (1+ 0.09)^5 = 38, 465.59 25,000 X (1+ 0.09)^4 = 35,289.54 25,000 X (1+ 0.09)^3 = 32, 375.725 25,000 X (1+ 0.09)^2 = 29,702.5 25,000 X (1+ 0.09)^1 = 27,250 Total = 163,083.355 0 X (1+ 0.08)^20 = 0 0 X (1 + 0.08) ^1 = 0 200,000 X (1 + 0.! 07)^30 = 1,522,451 200,000 X (1 + 0.07)^29= 1,422,851.41 200,000 X (1 + 0.07)^28= 1,242,773.52 200,000 X (1 + 0.07)^27= 1,242,773.52 - - 200,000 X (1 + 0.07)^5= 280,510.34 200,000 X (1 + 0.07)^4= 262,159.20 200,000 X (1 + 0.07)^3= 245,008.6 200,000 X (1 + 0.07)^2 = 228,980 200,000 X (1 + 0.07)^1 =...If you want to get a full essay, insert it on our website: OrderCustomPaper.com

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