Chapter 6

Problems 1-77

Input boxes in tan

Output boxes in yellow
Given data in blue
Calculations in red
Answers in green

NOTE: Some functions used in these spreadsheets may require that

the "Analysis ToolPak" or "Solver Add-In" be installed in Excel.
To install these, click on the File tab
then "Options," "Add-Ins" and select
"Go." Check "Analyis ToolPak" and
"Solver Add-In," then click "OK."
equire that
Chapter 6
Question 8

Input area:

 1
Desired amount $ 75,000 1 
(1  r ) t
# of years 12 PV  C 
Interest rate 6.8%  r


Output area: $4,242.25  (1  r ) t  1
FV  C 
 r

Annual deposit $ 4,242.25

  1 
1  
(1  r ) t
 C 
 r 

 

 (1  r ) t  1 
 C 
 r 
Chapter 6
Question 10,11

Input area:

Annual payment $ 30,000 PV = C/r

Interest rate 5.80% $ 517,241.38

Cost of policy $ 475,000 PV x r = C

r = C/PV
0.063157894737
Output area: 6.32%

Present value $ 517,241.38

Required interest rate 6.32%

Chapter 6
Question 14

Input area:
Output area:

Stated rate (APR) # of times per year Effective rate

First National Bank 13.2% 12 14.03%
First United Bank 13.5% 2 13.96%

1.011 14.03%
1.14028619649985 1.0675
14.03% 1.13955625
13.96%
 m
 APR 
EAR  1   1
 m 
Chapter 6
Question 15

Input area:
Output area:

Stated rate (APR) # of times per year Effective rate

13.98% 365 15.0%

This is deceptive because the borrower is actually paying

annualized interest of 15% per year, not the 13.98%
reported on the loan contract.

0.04%
13.98%
13.98%
APR  m  (1  EAR) m - 1
1

 
Chapter 6
Question 21

Input area:

Monthly payment $ 500

Discount rate 1.7%
Current balance $ 16,000

Output area:

# of months until paid off 46.58