You are on page 1of 4

# Chapter 2 Problems - Answers

1. 1.65%
2. a. IP = 1.00%
b. ij* = 6.65%
3. 1R2 = =7.085%
4. 1R1=6%
1R2 = 6.449%
1R3 = 6.832%
1R4 = 7.085%
5. 1R2 = 3.55%
6. E(2r1) = .12 = 12%
7. 1R1 = .1826 = 18.26%
8. E(5r1) = 8.379%
9. E(4r1) = 3.657%
E(5r1) = 4.514%
E(6r1) = 4.611%
10. 1R1 = 5.65%
1R2 = 6.223%
1R3 = 6.465%
1R4 = 6.666%
11. L2= .08145 = 8.145%
12. L4 = .001536 = 0.1536%
13. 7.51%
14. 14.18%
15. 2f1=5.15%
3f1= 5.85%
4f1= 6.86%
16. 4f1 = 7.41%
5f1 = 7.86%
6f1 = 7.85%
17. 1R1 = 4.5%

51 PV = \$5. PV = \$3.59 d.736.052.061.84 24.01 FV = \$313. PV = \$3. FV= \$28.618.19 c. PV = \$3. PV= \$85.15 25.683.05 FV = \$417.25 FV = \$15.94 PV = \$39.585.64 c.876.15 PV = \$20.051.57 e.74 PV = \$49.46 b. FV = \$117.08 20 a. PV = \$3. FV = \$7. FV= \$29.211.843. a.346.53 d.144.711.069.82 b.325.65 FV = \$251. PV= \$21.934.29 b. FV = \$8.219.767. FV = \$4. FV = \$179. FV = \$8. a.696. a.38 .61 22.823.691.01% 1R3 = 9. PV = \$3.1R2 = 6. PV = \$87.50 23. FV \$8.817.04% 18.63 FV = \$201.193.788.11 FV = \$925. FV = \$6.34 c. FV = \$115.362.01 PV = \$36.61 d.130. PV = \$55.84 21. PV = \$12.842.729.185. PV = \$22.104.35 19.92 c.13 b.47 e.55 d.198.402.352.

84 FV = \$52.519. PV = \$55.167.54 PV = \$49.83 FV \$454.55 34.946.40 FV =\$1.79 PV = \$70.48 PV = \$74.583.49 PV = \$194. FV = \$155.012.93 PV = \$3. . 32. the interest portion is \$95.282.863.28 FV = \$163.654.12 FV = \$4.15 PV = \$31.388.688.10)4 = \$8.93 years 35.330. I = 8.10 31.449. N = 4.43.595.560.08 26.325.37 PV = \$39.55 PV = \$314. PV = \$2.95 27.052.772.57 FV = \$48.470.161.35 FV = \$182.50 FV = \$1.91 PV = \$301. FV = \$500 (1.879.76%.540.54 29.287.98 28.51 = \$595.011.934.567.51.51 − \$500. So.PV = \$31. 36 PV =\$3.205.04 FV = \$204.500×(1.06 33. FV = \$3.06)3 = \$595.94 PV = \$148.998.844. PV \$1.27 FV = \$500.193.79 30 FV =\$45.006. FV = \$5.732.

I = 7. . or 3. 40.61. loan B is the better offer because the EAR on B < the EAR on A.61 x (1+0. FV =\$7. 39. 41.36% 43. EAR = 10. EAR on A =8.720.436% EAR on B = 8. EAR =12.10) = \$8.715.17. N = 45 months. PMT = \$1. then multiply \$7.420% So.715.17.487.68% 42.73 years.37.84%. 38.