Exercise 1

A) PV=?
r= 10%

$ 900
PV = =$ 818.182
1+ 0.1

$ 600
PV = =$ 495.868
(1+0.1)2

$ 1100
PV = =$ 826.446
(1+0.1)3

$ 1480
PV = 4
=$ 1010.86
(1+0.1)

PV =$ 3151.36

B) PV = ?
r = 18%

$ 900
PV = =$ 762.712
1+ 0.18

$ 600
PV = 2
=$ 430.911
(1+0.18)

$ 1100
PV = 3
=$ 669.494
(1+0.18)

$ 1480
PV = =$ 763.368
(1+0.18)4

PV =$ 2626.48
 C) PV = ?
r = 24%

$ 900
PV = =$ 725.806
1+ 0.24

$ 600
PV = =$ 390.219
(1+0.24)2

$ 1100
PV = =$ 576.936
(1+0.24)3

$ 1480
PV = 4
=$ 626.001
(1+0.24)

PV =$ 2318.96

Exercise 5
Cash = $15,000
r = 7.5%
n = 12
Annuity Present Value =C ×1−¿ ¿

$ 15,000=C × 1−¿ ¿

1−0.4199
$ 15,000=C ×
0.075

$ 15,000=C × 7.73467
$ 15,000
=C
7.73467

$ 1939.32=C
Exercise 9
Cash = $30,000
r = 9%
n=7
Annuity Present Value =C ×1−¿ ¿

$ 30,000=C × 1−¿ ¿

1−0.547034
$ 30,000=C ×
0.09

$ 30,000=C × 5.03296

$ 30,000
=C
5.03296

$ 5960.71=C

Exercise 13
A) EAR = 12%
m=2
EAR=¿
0.12=¿
APR=11.66 %

B) EAR = 18%
m = 12
EAR=¿
0.18=¿
APR=16.67 %

C) EAR = 7%
 m = 52
EAR=¿
0.07=¿
APR=6.77 %

D) EAR = 11%
m = 365
EAR=¿
0.11=¿
APR=10.44 %