CHAPTER 4 B – 1
49.
Enter
5
7.4%
$17,500
N
I/Y
PV
PMT
FV
Solve for
$70,991.47
2nd BGN 2nd SET
Enter
5
7.4%
$17,500
N
I/Y
PV
PMT
FV
Solve for
$76,244.84
Enter
5
7.4%
$17,500
N
I/Y
PV
PMT
FV
Solve for
$101,444.28
2nd BGN 2nd SET
Enter
5
7.4%
$17,500
N
I/Y
PV
PMT
FV
Solve for
$108,951.16
50. 2nd BGN 2nd SET
Enter
60
4.89%/12
$83,000
N
I/Y
PV
PMT
FV
Solve for
$1,555.79
53. 2nd BGN 2nd SET
Enter
24
9.7%/12
$3,100
N
I/Y
PV
PMT
FV
Solve for
$141.48
54. PV of college expenses:
Enter
4
9.2%
$55,000
N
I/Y
PV
PMT
FV
Solve for
$177,405.18
Enter
14
9.2%
$177,405.18
N
I/Y
PV
PMT
FV
Solve for
$51,742.73
Enter
16
9.2%
$177,405.18
N
I/Y
PV
PMT
FV
Solve for
$43,391.44
Enter
15
9.2%
$95,134.17
N
I/Y
PV
PMT
FV
Solve for
$11,941.94
Aftertax cash flows = $256,000
2ND BGN 2nd SET
Enter
31
4.5%
$256,000
N
I/Y
PV
PMT
FV
Solve for
$4,425,955.47
Enter
30
4.5%
$208,000
N
I/Y
PV
PMT
FV
Solve for
$3,388,088.82
Total value = $3,388,088.82 + 1,000,000 = $4,388,088.82
58.
Enter
5 × 12
5.8%/12
$34,000
N
I/Y
PV
PMT
FV
Solve for
$654.16
Enter
34
5.8%/12
$654.16
N
I/Y
PV
PMT
FV
Solve for
$20,464.53
Total payment = $21,323.33
59. Pre-retirement APR:
Enter
11%
12
CHAPTER 4 B – 3
NOM
EFF
C/Y
Solve for
10.48%
Enter
7%
12
NOM
EFF
C/Y
Solve for
6.785%
Enter
Solve for
Enter
Solve for
Solve for
Enter
Solve for
Enter
Solve for
Solve for
CHAPTER 4 B – 4
61.
Enter
5%
365
NOM
EFF
C/Y
Solve for
5.13%
CFo
$7,000,000
C01
$6,100,000
F01
1
C02
$6,900,000
F02
1
C03
$7,600,000
F03
1
C04
$8,200,000
F04
1
C05
$9,500,000
F05
1
C06
$8,400,000
F06
1
I = 5.13%
NPV CPT
$45,922,807.29
Enter
24
1.258%
$39,422,807.29
N
I/Y
PV
PMT
FV
Solve for
$1,913,224.07
62.
Enter
1
$17,100
$20,000
N
I/Y
PV
PMT
FV
Solve for
16.96%
63.
Enter
9%
12
NOM
EFF
C/Y
Solve for
8.65%
Enter
12
8.65%/12
$42,000/12
N
I/Y
PV
PMT
FV
Solve for
$43,705.55
Enter
12
8.65%/12
$43,705.55
$45,000/12
N
I/Y
PV
PMT
FV
Solve for
$94,466.42
Enter
60
8.65%/12
$49,000/12
N
I/Y
PV
PMT
FV
Solve for
$198,332.55
Award = $94,466.42 + 198,332.55 + 150,000 + 25,000 = $467,798.97
64.
Enter
1
$9,800
$11,250
N
I/Y
PV
PMT
FV
Solve for
14.80%
65.
Enter
1
$9,700
$10,900
N
I/Y
PV
PMT
FV
Solve for
12.37%
66. Refundable fee: With the $2,400 application fee, you will need to borrow $227,400 to have
$225,000 after deducting the fee. Solve for the payment under these circumstances.
Enter
30 12
5.4%/12
$227,400
N
I/Y
PV
PMT
FV
Solve for
$1,276.92
Enter
30 12
$225,000
$1,276.92
N
I/Y
PV
PMT
FV
Solve for
.4580%
Enter
5.50%
12
NOM
EFF
C/Y
Solve for
5.64%
Enter
5.40%
12
NOM
EFF
C/Y
Solve for
5.54%
67.
Enter
36
$2,500
$112.66
N
I/Y
PV
PMT
FV
Solve for
2.89%
Enter
34.70%
12
NOM
EFF
C/Y
Solve for
40.78%
69. Without fee:
Enter
18.2%/12
$10,000
$175
N
I/Y
PV
PMT
FV
Solve for
133.86
Enter
7.9%/12
$10,000
$175
N
I/Y
PV
PMT
FV
Solve for
71.92
Enter
7.9%/12
$10,300
$175
N
I/Y
PV
PMT
FV
Solve for
74.70
70. Value at Year 6:
Enter
5
10%
$750
N
I/Y
PV
PMT
FV
Solve for
$1,207.88
Enter
4
10%
$750
N
I/Y
PV
PMT
FV
Solve for
$1,098.08
Enter
3
10%
$850
N
I/Y
PV
PMT
FV
Solve for
$1,131.35
Enter
2
10%
$850
N
I/Y
PV
PMT
FV
Solve for
$1,028.50
Enter
1
10%
$950
N
I/Y
PV
PMT
FV
Solve for
$1,045
So, at Year 5, the value is: $1,207.88 + 1,098.08 + 1,131.35 + 1,028.50 + 1,045
CHAPTER 4 B – 7
+ 950 = $6,460.81
At Year 65, the value is:
Enter
59
8%
$6,460.81
N
I/Y
PV
PMT
FV
Solve for
$605,742.96
The policy is not worth buying; the future value of the policy is $605,742.96 but the policy contract
will pay off $500,000.
71. Effective six-month rate = (1 + Daily rate)182.5 – 1
Effective six-month rate = (1 + .08/365)182.5 – 1
Enter
40
4.08%
$1,750,000
N
I/Y
PV
PMT
FV
Solve for
$34,225,650.04
Enter
1
4.08%
$34,225,650.04
N
I/Y
PV
PMT
FV
Solve for
$32,883,787.23
Value of winnings today = $32,883,787.23 + 4,000,000
Value of winnings today = $36,883,787.23
72.
CFo
$15,000
C01
$15,000
F01
5
C02
$32,000
F02
4
IRR CPT
7.21%
76. Six-month rate = [1 + (.081/12)]6 – 1
Enter
60
4.12%
$600,000
N
I/Y
PV
PMT
FV
Solve for
$13,273,850.84
Enter
40
6.24%
$900,000
N
I/Y
PV
PMT
FV
Solve for
$13,139,463.25
CHAPTER 4 B – 8
77.
a. APR = 5.5% 52 = 286%
Enter
286%
52
NOM
EFF
C/Y
Solve for
1,518.56%
b.
Enter
1
$94.50
$100.00
N
I/Y
PV
PMT
FV
Solve for
5.82%
APR = 5.82% 52 = 302.65%
Enter
302.65%
52
NOM
EFF
C/Y
Solve for
1,794.72%
c.
Enter
4
$76.12
$25
N
I/Y
PV
PMT
FV
Solve for
11.88%
APR = 11.88% 52 = 617.96%
Enter
617.96%
52
NOM
EFF
C/Y
Solve for
34,246.90%