Appendix B • Worked-out SolutionS B-1
Chapter 5: Using Equations to Solve Business Problems
5
SECTION I
APPENDIX B Worked-out SolutionS
1.
B+11 =24
−11 −1
1
B
=1
3
Proof:
13 +11 =24
24 =2
4
D
72 −32 =40
0
S
90 +35 =125
=
4.
M−58 =12
+58 +5
8
M
=7
0
Proof:
70 −58 =12
12 =1
2
1
6.
Z
3=45
(
3)Z
3=45(3)
Z
=
135
Proof:
135
3=4
5
45 =45
5
8.
L
5=8
(5)L
Proof:
40
5=
8
8=8
G=4
10.
C
4−3=10
4a
C
4
b
=4(13
)
Proof:
52
4−3=1
0
25A=75
A=3
64
=
6
4
12.
R
5+33 =8
4
−33 −33
(
5)
R
5=51(5)
R
=
255
Proof:
255
5+33 =8
4
51 +33 =8
4
B-2 Appendix B • Worked-out SolutionS
14.
C+5=26 −2C
+2C+2
C
3C+5=26
3C+5=26
−5−
5
3C=21
3C
3=
21
3
C
=
7
Proof:
7+5=26 −2(7)
12 =26 −14
12 =12
Assessment Test
1.
W+10 =53
−10 −10
W
=43
Proof:
65 +45 =110
110 =11
0
G
99 −24 =75
11K
6
7
5.
8X−15 =49
+15 +15
8X=64
8X
8=
64
8
X=8
Proof:
8(8) −15 =49
64 −15 =49
49 =49
6.
S
7=12
(7)(S)
Proof:
84
7=1
2
12 =1
2
9.
4(3X+8) =212
12X+32 =21
2
−32 −3
2
12X=180
12X
12 =
180
12
X=15
Proof:
4(3(15) +8) =212
4(45 +8) =212
4(53) =212
212 =212
Chapter 7: Invoices, Trade Discounts,
and Cash Discounts
7
SECTION II
6.
286.00 ×.25 =$71.50
286.00 −71.50 =$214.50
7.
134.79 ×.4 =$53.92
134.79 −53.92 =$80.87
21.29 ×.18 =$3.83
100% −37% =63%
100% −24% =76%
12.
100% −45.8% =54.2%
$1,244.25 ×.542 =$674.38
13.
100% −12.75% =87.25% $4.60 ×.8725 =$4.01
2.89
24D
5V+5=20
1+20 =3(9 −2(1))
Appendix B • Worked-out SolutionS B-3
1.
Net price factor = 100% 100%
−12% −10%
.88 × .90 =.79
2
5.
Net price factor =.75 ×.85 ×.895 =.57056
N
et price
=
7.25
×
.57056
=
$4.14
6.
Net price factor =.80 ×.91 ×.92 =.66976
N
et price
=
.39
×
.66976
=
$.26
Net price factor =.85 ×.90 =.765
S
Net price factor =.80 ×.85 ×.88 =.5984
S
Net price factor =.75 ×.85 ×.93 =.59288
S
Net price factor =.70 ×.95 ×95 =.63175
S
Net price factor =.65 ×.85 ×.925 =.51106
S
.34334
×
.34334
×
.65666
$303.34
$580.16
.7128
.2872
×
.2872
$1.40
$3.49
12.
Net Price
Factor
Single
Equivalent
Discount
Trade
Discount
Net
Price
.85 × .95 × .95 1.00 − .76713 $7,800.00 $7,800.00
.76713
.23287
×
.23287
×
.76713
$1,816.39
$5,983.61
.5292
.4708
×
.4708
×
.5292
SECTION III
SECTION IV
13.
Net Price
Factor
Single
Equivalent
Discount
Trade
Discount
Net
Price
.60563
.39437
×
.39437
×
.60563
$221.12
$339.58
15.
Net Price
Single
Equivalent
Trade
Net
17.
Net Price
Factor
Single
Equivalent
Discount
Trade
Discount
Net
Price
.70 × .80 × .945 1.00 − .5292 $2,874.95 $2,874.95
1.
CD =$15,800.00 ×.03 =$474.00
N
AD
=
$15,800.00
−
$474.00
=
$15,326.0
0
CD =$12,660.00 ×.02 =$253.20
N
=
−
=
0
CD =$2,421.00 ×.04 =$96.84
N
=
CD =$6,010.20 ×.04 =$240.41
N
CD =$9,121.44 ×.035 =$319.25
N
N
=
C
N
=
C
$3,200
3
N
=
C
$5,500
6
N
=
6.
C
redit for partial payment =
$2,500
.98 =$2,551.0
2
85461_appB_hr_B1-B48_1.indd 3 9/23/15 4:24 PM
N
=
=
Net price factor =.82 ×.85 ×.95 =.66215
N
=
Net price factor =.80 ×.90 ×.90 =.648
N
=
=
Net price factor =.85 ×.90 ×.95 =.72675
N
=
.6324
.3676
×
.3676
×
.6324
$441.12
$758.88
B-4 Appendix B • Worked-out SolutionS
Chapter 8: Markup and Markdown
1.
M=SP −C=299.95 −161.50 =$138.45
%
MC=M
C
=138.45
161.50
=.8572 =85.7%
5.
C
=
SP
100% +%MC
=
249.95
100% +60% =
249.95
1.6 =$156.2
2
M
=SP −C=249.95 −156.22 =$93.73
6.
SP =C+M=46.25 +50.00 =$96.25
%
MC=M
C
=50.00
46.25
=1.081 =108.1%
7.
M=SP −C=3,499.00 −1,350.00 =$2,149.00
%
MC=M
C
=2,149.00
1,350.00
=1.592 =159.2%
%
C
1,455.00
M
C
SP
44.95
M
8
SECTION I
SECTION II
1.
SP =C+M=65.00 +50.00 =$115.00
%
MSP =M
SP
=50.00
115.00
=.4347 =43.5%
2.
%
SP
51.50
S
M=SP −C=51.50 −34.44 =$17.06
32.40
6,944.80
M
Appendix B • Worked-out SolutionS B-5
5.
%
MSP =
%M
C
100%
+
%M
C
=
60%
100%
+
60% =
.6
1.6 =.375 =37.5
%
8.
SP =C+M=1.18 +.79 =$1.97
%
MC=M
C=.79
1.18 =.6694 =66.9%
%
MSP =M
SP
=.79
1.97
=.4010 =40.1
%
10.
C=SP(100% −%M
SP
)=1,299.00(100% −55%) =1,299(.45) =$584.55
M
=SP −C=1,299.00 −584.55 =$714.45
%
MC=M
C
=714.45
584.55
=1.2222 =122.2%
%
%M
+
C
150%
%
SECTION III
1.
Sale price =Original price −Markdown =189.95 −28.50 =$161.45
M
D%=MD
Original price
=28.50
189.95
=.1500 =15%
2.
MD =Original price −Sale price =53.88 −37.50 =$16.38
M
D=MD
Original price
=16.38
53.88
=.3040 =30.4%
Original sale price =Sale price +MD =1.29 +.39 =$1.68
M
Original price
85461_appB_hr_B1-B48_1.indd 5 9/23/15 4:24 PM
%
35%
165.99
B-6 Appendix B • Worked-out SolutionS
6.
MD =Original price −Sale price =68.00 −51.99 =$16.01
MD%=MD
Original price
=16.01
68.00
=.2354 =23.5%
7.
Sale price =Original price −MD =115.77 −35.50 =$80.27
Chapter 9: Payroll
18.
50 ×3.60 =180.00
19.
50 ×3.60 =180.00
20.
50 ×3.60 =180.00
9
SECTION I
SECTION II
9.
T
76.00 ×2=152.00
10.
0 Exemptions
T
ax =37.80 +.15(1,227 −427
)
T
11.
329.20 ×1=329.20
12.
151.90 ×4=607.60
1.
I=PRT =5,000 ×.08 ×2=$800
2.
I
=PRT =60,000 ×.0675 ×
9
12
=$3,037.5
0
I
12
0
I=PRT =80,000 ×.06 ×3.5 =$16,800.00
5.
I
=PRT =6,440 ×.055 ×
7
12
=$206.6
2
6.
I=PRT =13,200 ×.092 ×4.75 =$5,768.40
85461_appB_hr_B1-B48_1.indd 6 9/23/15 4:24 PM
Original price
Original price =Sale price +MD =235.00 +155.00 =$390.00
Original price
Appendix B • Worked-out SolutionS B-7
8.
I=PRT
E
xact: 184,500 ×.0775 ×58
365 =$2,272.13
O
rdinary: 184,500 ×.0775 ×58
360
=$2,303.6
9
360
11.
I=PRT
E
xact: 900 ×.1025 ×60
365 =$15.1
6
O
rdinary: 900 ×.1025 ×60
360
=$15.3
8
12.
E
O
I=PRT
E
O
360
I=PRT
E
O
M
=
+
=
I=PRT
15.
I=PRT
E
xact: 50,490 ×.0925 ×69
365 =$882.88
O
rdinary: 50,490 ×.0925 ×69
360
=$895.1
5
16.
I=PRT
E
xact: 486,000 ×.135 ×127
365 =$22,828.68
O
rdinary: 486,000 ×.135 ×127
360
=$23,145.7
5
20.
I=PRT =91,000 ×.0925 ×2.5 =$21,043.75
M
V
=
P
+
I
=
91,000.00
+
21,043.75
=
$112,043.7
5
21.
I=PRT =56,200 ×.102 ×4=$22,929.60
M
V
=
P
+
I
=
56,200
+
22,929.60
=
$79,129.6
0
22.
I
=PRT =135,000 ×.077 ×
18
12 =$15,592.50
29.
30
− 5
30.
30
− 27
31.
31
−
23
32.
31
−
9
33.
31
−
2
34.
30
−18
12 Novembe
r
35.
31
− 19
12 Oct
36.
28
−
5
23 Feb
37.
31
− 26
5 May
I=PRT
E
O
I=PRT
E
O
M
I
M
I
M
=
+
=
+
B-8 Appendix B • Worked-out SolutionS
1.
P
=
I
RT
=
300
.12 ×2
=$1,250.0
0
2.
P
=
I
RT
=
675
.09 ×1.5
=$5,000.0
0
6.
P
=
I
RT =
2,250
.06 ×6
12
=$75,00
0
7.
P
=
I
RT
=
8,190
.105 ×3
=$26,00
0
8.
R
=
I
PT
=
1,200
5,000 ×3
=8
%
9.
R
=
I
PT =
105
1,800 ×5
12
=14
%
R
I
PT
MV =P+I=13,063.16 +340.00 =$13,403.16
15. T=
I
PR =
948
18,000 ×.12 =.4388889
×360
158 Days
×36
0
102 Days
20. T=
I
PR
=
3,936
41,000 ×.064
=1.5 Year
s
21. T=
I
PR
=
125
3,600 ×.143
=88 Day
s
22. T=
I
PR =
760
16,000 ×.13 =.3653846
×360
132 Days
MV =P+I=16,000 +760 =$16,760.00
38.
31
−
21
39.
31
−
6
40.
31
−
13
41.
30
−
27
SECTION II
85461_appB_hr_B1-B48_2.indd 8 9/23/15 4:24 PM
P
I
3,000
12
0
I
308 Days
PR
Appendix B • Worked-out SolutionS B-9
1.
B
ank Discount =FV ×R×T=4,500 ×.13 ×
6
12
=$292.5
0
Proceeds =FV −Discount =4,500 −292.50 =$4,207.50
2.
B
ank Discount =FV ×R×T=235 ×.113 ×
50
360
=$3.6
9
Proceeds =FV −Discount =235.00 −3.69 =$231.31
6.
Maturity date =
30 27
June
B
7.
Term =30 14
Apr
−16 61
May–Jun
e
B
8.
Maturity date = 30 27
Sept
−3 61
Oct–Nov
B
360
Proceeds =FV −Discount =800.00 −29.31 =$770.69
9.
Term =31 12
Aug
−19 61
Sept–Oc
t
12 Days
27
Days
B
Proceeds =FV −Discount =1,300.00 −34.31 =$1,265.69
SECTION III
Proceeds =FV −Discount =2,000 −150 =$1,850
B
Proceeds =FV −Discount =35,000 −3,096.04 =$31,903.96
B
Proceeds =FV −Discount =7,800 −232.38 =$7,567.62
B-10 Appendix B • Worked-out SolutionS
10.
Maturity date = 31 24
May
− 7 29
June
June 29
24 Days
53
12. Bank discount =FV ×R×T=6,505.00 ×.1039 ×
73
360
=$137.0
5
Proceeds =FV −Discount =6,505.00 −137.05 =$6,367.95
Effective rate =
Discount
Proceeds ×Time =
137.05
6,367.95 ×73
360
=10.61
%
13. Bank discount =FV ×R×T=3,800 ×.0725 ×
Proceeds =FV −Discount =3,800.00 −$107.14 =$3,692.86
Proceeds =FV −Discount =95,000.00 −1,151.88 =$93,848.12
140
=$107.1
4
15. Bank discount =FV ×R×T=57,500 ×.1275 ×
230
360
=$4,683.8
5
Proceeds =FV −Discount =57,500.00 −4,683.85 =$52,816.15
16.
Maturity date = 31 27
Mar
−4 30
Apr
27 Days
13
May
May 1
3
70
Days
53
Proceeds =FV −Discount =75,000.00 −552.08 =$74,447.92
Proceeds =FV −Discount =2,700.00 −132.30 =$2,567.70
Discount
132.30
360
%
Appendix B • Worked-out SolutionS B-11
17.
Maturity date =31 19
Dec
−12 31
Jan
January 3
1
19
Days
50
Days
18.
Maturity date =30 23
June
−7 92
July–Sept
23
Days
10
Oct
October 1
0
125
Days
19.
Maturity date =31
−10
21 May
30 June
20.
Maturity date =30
−12
18 Sept
B-12 Appendix B • Worked-out SolutionS
Discount Period =31
21. Interest =Face value ×Discount rate ×Time =15,000 ×.052 ×
13
52
=$19
5
Purchase price =Face value −Interest =15,000 −195 =$14,805
Effective interest rate =
Interest
Purchase price ×Time =
195
14,805 ×13
52
=.05268 =5.27
%
26
52
Purchase price =Face value −Interest =50,000 −1,100 =$48,900
E
Interest
52
%
Purchase price =Face value −Interest =80,000 −964 =$79,036
E
Interest
964
%
52
24.
Interest =Face Value ×Discount Rate ×Time
=35,000 ×.038 ×4
52
=$102.31
Purchase Price =Face Value −Interest =35,000 −102.31 =$34,897.69
E
ffective Interest =
Interest
Purchase price ×Time =
102.31
34,897.69 ×4
52
=3.81
%
Interest =Face Value ×Discount Rate ×Time
E
Interest
52
%
Assessment Test
1.
I
=PRT =15,000 ×.13 ×
120
365
=$641.1
0
I
365
4. I=PRT =286,000 ×.135 ×
224
360
=$24,024.0
0
85461_appB_hr_B1-B48_2.indd 12 9/23/15 4:24 PM
Appendix B • Worked-out SolutionS B-13
7.
30 14 Apr
−16 92 May–Jul
y
14 Days 1 Aug
107 Days
10.
31 16 May
−15 92 June–Aug
16 Days 3 Sept September
3
111 Days
11. P=
I
RT
=
2,800
.07 ×2
=$20,00
0
B
Proceeds =FV −Discount =875,000.00 −20,088.54 =$854,911.46
Proceeds =FV −Discount =22,500.00 −393.75 =$22,106.25
15.
T
=I
PR =
350
13,500 ×.06 =.4320987654
×360
155.56 =156 Day
s
16.
T
=I
PR =
625
7,900 ×.104 =.7607108
×360
273.8 =274 Day
s
18.
P
=
I
RT =
1,790
.122 ×133
365
=$40,265.6
2
MV =P+I=40,265.62 +1,790.00 =$42,055.62
131 Days
B
ank Discount =FV ×R×T=50,000 ×.13 ×
131
360
=$2,365.2
8
Proceeds =FV −Discount =50,000.00 −2,365.28 =$47,634.72
21.
31 6 Oct
−25 61 Nov–Dec
E
ffective rate =
Discount
Proceeds ×Time =
393.75
22,106.25 ×60
360
=10.69
%
23.
B
ank discount =FV ×R×T=290,000 ×.119 ×
110
360
=$10,544.7
2
Proceeds =FV −Discount =290,000.00 −10,544.72 =$279,455.28
E
ffective rate =
Discount
Proceeds ×Time =
10,544.72
=12.35
%
85461_appB_hr_B1-B48_2.indd 13 9/23/15 4:24 PM
30 0 Nov
55 Days
B-14 Appendix B • Worked-out SolutionS
24.
Maturity date =30 19 Jan
−12 59 Feb–Mar
19 Days 5 Apr April
5
83 Days
25.
Maturity date =30 13 June
−17 31 July
13 Days 25 Aug
August 2
5
69 Days
26.
I
nterest =Face value ×Discount rate ×Time =75,000 ×.0515 ×
52
=$297.1
2
Purchase price =Face value −Interest =75,000 −297.12 =$74,702.88
E
ffective interest rate =
Interest
Purchase price ×Time =
297.12
74,702.88 ×4
52
=.05171 =5.17
%
I
Purchase price =Face value −Interest =28,000 −686 =$27,314
E
Interest
Chapter 11: Compound Interest
and Present Value
11
SECTION I
1.
Periods =Years ×Periods/Year =3×1=3
Rate per period =
Nominal Rate
Periods/Year
=
13
1
=13
%
Periods =Years ×Periods/Year =5×4=20
Nominal Rate
Periods/Year
4
%
Periods =Years ×Periods/Year =6×12 =72
Nominal Rate
Periods/Year
3.
Periods =Years ×Periods/Year =12 ×2=24
Rate per period =
Nominal Rate
Periods/Year
=
8
2
=4
%
85461_appB_hr_B1-B48_2.indd 14 9/23/15 4:24 PM
Appendix B • Worked-out SolutionS B-15
10.
8,000.00 Original principal
+320.00 Interest period 1 (8,000 ×.08 ×.5 =320)
8,320.00 Principal period 2
9,733.22 Principal period 6
+389.33 Interest period 6 (9,733.22 ×.08 ×.5 =389.33
)
$10,122.55 Compound amount
2,120.00 Principal Period 2
+
127.20 Interest Period 2 (2,120.00 ×.06 ×1)
2,247.20 Principal Period 3
+
134.83 Interest Period 3 (2,247.20 ×.06 ×1)
$
12.
13%, 4 Periods
Compound amount =Table factor ×Principal
1.63047 ×7,000 =$11,413.29
Compound interest =Compound amount −Principal
11,413.29 −7,000.00 =$4,413.29
2%, 12 Periods
Compound amount =Table factor ×Principal
Compound interest =Compound amount −Principal
14.
2%, 12 Periods
Compound amount =Table factor ×Principal
1.26824 ×5,300 =$6,721.6
7
Compound interest =Compound amount −Principal
6,721.67 −5,300.00 =$1,421.67
15.
Compound amount =Table factor ×Principal
Compound interest =Compound amount −Principal
11
%, 24 Periods
5.
Periods =Years ×Periods/Year =4×4=16
R
ate per period =
Nominal Rate
Periods/Year
=
6
4
=1.5
%
Periods/Year
4
8.
4,000 Original principal
+400 Interest period 1 (I=PRT)(4,000 ×.1 =400)
9.
10,000.00 Original Principal
+100.00 Interest period 1 (10,000 ×.04 ×.25 =100)
10,100.00 Principal period 2
85461_appB_hr_B1-B48_3.indd 15 9/23/15 4:25 PM
Periods =Years ×Periods/Year =9×2=18
R
Nominal Rate
Periods/Year
Periods =Years ×Periods/Year =.75 ×4=3
R
Nominal Rate
B-16 Appendix B • Worked-out SolutionS
16.
5%
, 15 Periods
Compound amount =Table factor ×Principal
2.07893 ×25,000 =$51,973.2
5
Compound interest =Compound amount −Principal
51,973.25 −25,000.00 =$26,973.25
450.86 −400.00 =$50.86
18.
5%
, 25 Periods
Compound amount =Table factor ×Principal
3.38635 ×8,800 =$29,799.8
8
Compound interest =Compound amount −Principal
29,799.88 −8,800.00 =$20,999.88
Table factor required =1%
1%, 18 Periods: 1.19615
Compound amount =Table factor ×Principal
1
Table factor required =9%
9%, 15 Periods: 3.34173
9
Compound amount =Table factor ×Principal
21.
Table factor required =1%
, 44 Periods
1%, 22 Periods: 1.24472
1%, 22 Periods: ×1.24472
44 Periods 1.549327 =1.54933 “New” factor 1%, 44 Period
s
Compound amount =Table factor ×Principal
1.54933 ×34,700 =$53,761.7
5
Table factor required =3%
3%, 20 Periods: 1.80611
Compound amount =Table factor ×Principal
Table factor required =3%
3%, 16 Periods: 1.60471
s
Compound amount =Table factor ×Principal
Compound amount =Table factor ×Principal
Compound interest =Compound amount −Principal
Appendix B • Worked-out SolutionS B-17
Principal =
5,000.00 =10.25
25.
4%
, 1 Period
Compound amount =Table factor ×Principal
1.04000 ×2,000 =$2080.00
Compound interest =Compound amount −Principal
2080.00 −2,000.00 =$80.00
Annual percentage yield (APY) =
1 year interest
Principal
=
80.00
2,000.00
=4%
1%
Compound amount =Table factor ×Principal
1.12683 ×36,000 =$40,565.88
Compound interest =Compound amount −Principal
1 year interest
27.
2%
, 4 Periods
Compound amount =Table factor ×Principal
1.08243 ×1,000 =$1,082.43
Compound interest =Compound amount −Principal
1,082.43 −1,000.00 =$82.4
3
Annual percentage yield (APY) =
1 year interest
Principal
=
82.43
1,000.00
=8.24
%
Compound amount =Table factor ×Principal
1.06090 ×8,000 =$8,487.20
Compound interest =Compound amount −Principal
487.20
35.
i
=
4.2%
2
=2.1% =.021, n=4×2=
8
A=P(1 +i)n
A=5,000(1 +.021)8=$5,904.40
Compound Interest =Compound amount −Principal
Compound interest =5,904.40 −5,000.00 =$904.40
i
1.5%
i
3.1%
4
85461_appB_hr_B1-B48_3.indd 17 9/23/15 4:25 PM
5%
Compound amount =Table factor ×Principal
1.10250 ×5,000 =$5,512.50
Compound interest =Compound amount −Principal
1 year interest
B-18 Appendix B • Worked-out SolutionS
1.
9%
, 3 Periods
Present value =Table factor ×Compound amount
.77218 ×6,000 =$4,633.08
Compound interest =Compound amount −Present value
6,000.00 −4,633.08 =$1,366.9
2
4.
3%
, 24 Periods
Present value =Table factor ×Compound amount
.49193 ×2,000 =$983.86
Compound interest =Compound amount −Present value
2,000.00 −983.86 =$1,016.14
Present value =Table factor ×Compound amount
Compound interest =Compound amount −Present value
2%
Present value =Table factor ×Compound amount
Compound interest =Compound amount −Present value
7.
3%
, 16 Periods
Present value =Table factor ×Compound amount
.62317 ×9,800 =$6,107.07
Compound interest =Compound amount −Present value
9,800.00 −6,107.07 =$3,692.9
3
4%
Present value =Table factor ×Compound amount
SECTION II
85461_appB_hr_B1-B48_3.indd 18 9/23/15 4:25 PM
2%
Present value =Table factor ×Compound amount
Compound interest =Compound amount −Present value
2%
Present value =Table factor ×Compound amount
Compound interest =Compound amount −Present value
Appendix B • Worked-out SolutionS B-19
9.
1
2
%, 12 Periods
Present value =Table factor ×Compound amount
.94191 ×250 =$235.48
Compound interest =Compound amount −Present value
250.00 −235.48 =$14.5
2
11.
Table factor required =4%
, 40 Periods
4%, 20 Periods: .45639
4
%, 20 Periods: ×.45639
40 Periods .2082918 =.20829 “New” factor 4%, 40 Periods
Present value =Table factor ×Compound amount
.20829 ×12,000 =$2,499.4
8
Table factor required =7%
7%, 19 Periods: .27651
Present value =Table factor ×Compound amount
8
13.
Table factor required =1.5%
, 48 Periods
1.5%, 24 Periods: .69954
1.5%, 24 Periods: ×.69954
48 Periods .489356 =.48936 “New” factor 1.5%, 48 Periods
Present value =Table factor ×Compound amount
.48936 ×1,400 =$685.10
Table factor required =3%
3%, 23 Periods: .50669
Present value =Table factor ×Compound amount
Table factor required =4%
Present value =Table factor ×Compound amount
Assessment Test
1.
2%
, 12 Periods
Compound amount =1.26824 ×14,000 =$17,755.36
Compound interest =17,755.36 −14,000 =$3,755.3
6
2. 1
1
2
%, 20 Periods
Compound amount =1.34686 ×7,700 =$10,370.82
2%
Present value =Table factor ×Compound amount
Compound interest =Compound amount −Present value
B-20 Appendix B • Worked-out SolutionS
5.
Table factor required =2%
, 44 Periods
2%, 22 Periods: 1.54598
2%, 22 Periods: ×1.54598
44 Periods 2.39005416 =2.39005 “New” factor 2%, 44 Period
s
Compound amount =2.39005 ×20,000 =$47,801.00
Compound amount =1.27049 ×10,000 =$12,704.90
7.
1%
, 12 Periods
Compound amount =1.12683 ×8,500 =$9,578.06
1 year interest =9,578.06 −8,500.00 =$1,078.06
Annual percentage yield
1
APY
2
=1 year interest
Principal
=1, 078.06
8,500.00
=12.68
%
2%
Compound amount =1.08243 ×1,000,000 =$1,082,430.00
1
2
Principal
15%
Present value =.04620 ×150,000 =$6,930.00
10.
2%
, 5 Periods
Present value =.90573 ×20,000 =$18,114.60
C
ompound interest =20,000.00 −18,114.60 =$1,885.40
Present value =.73150 ×900 =$658.35
2%
Present value =.90573 ×5,500 =$4,981.52
85461_appB_hr_B1-B48_3.indd 20 9/23/15 4:25 PM
Compound amount =1.06168 ×3,000 =$3,185.04
11%
Compound amount =7.26334 ×42,000 =$305,060.28