PROBLEM 3 PROBLEM 4

a) PV 500 a) PV 1,122
FV 555 FV 856
Interest 0.900900901 Interest 7%
11% 1.310747664
Period 4 periods
b) PV 1,850
FV 2,078.66 b) PV 725.5
Interest 0.88999644 FV 450
6% Interest 3%
1.61222222
c) PV 750 Period 4 years
FV 1,114.46
Interest 0.672971663 c) PV 750
2x4= 8% FV 1,114.46
Interest 2.50%
d) PV 12,500 0.672971663
FV 2,134.24 Period 12 periods
Interest 5.856885824 or 3 years
1.5 x .12 = 18%

b) The discount from the

company's perspective should
be calculated in the same way
as condition 1 with the interest
rate that the compay borrows.
If Brandywine's rate is higher
than Branson's, it will perceive
a greater discount.
PROBLEM 6 PROBLEM 14
1) FV 10,000 a) FV 12,000,000
FV (6,2) 0.89 FV (6,20) 36.7856
8,900 PMT 326,215
PMT 10,000
18,900 b) FV 12,000,000
Effective Discount 5.50% FV (6,15) 23.276
PMT 515,553
2) FV 10,000
FV (8,2) 0.8573 c) FV 12,000,000
8,573 FV (6,10) 13.1808
PMT 10,000 PMT 910,415
18,573
Effective Discount 7.10% d) FV 12,000,000
FV (6,5) 5.6371
3) FV 10,000 PMT 2,128,754
FV (10,2) 0.8264
8,264
PMT 10,000
18,264
Effective Discount 8.70%

4) FV 10,000
FV (12,2) 0.8264
8,264
PMT 10,000
18,264
Effective Discount 8.70%

b) The discount from the

company's perspective should
be calculated in the same way
as condition 1 with the interest
rate that the compay borrows.
If Brandywine's rate is higher
than Branson's, it will perceive
a greater discount.