APPENDIX B • WORKED-OUT SOLUTIONS B-21
1.
R=2% P=16 F=18.6329
Future value =1,000 ×18.6329 =$18,632.90
2.
R=2% P=10 F=10.94972
Future value =2,500 ×10.94972 =$27,374.30
5.
R=1.5% P=28 F=34.48148
Future value =1,500 ×34.48148 =$51,722.22
6.
R=5% P=24 +1=25 F=47.72710 −1.00000 =46.72710
Future value =400 ×46.72710 =$18,690.84
Future value =1,000 ×13.68033 =$13,680.33
Future value =50 ×32.44142 =$1,622.07
R=5% P=25 +1=26 F=51.11345 −1.00000 =50.11345
Future value =2,000 ×50.11345 =$100,226.90
R=3% P=16 +1=17 F=21.76159 −1.00000 =20.76159
Future value =4,400 ×20.76159 =$91,351.00
16.
F
V=PMT ×
(1 +i)n−1
i
i
=3%
2=1.5% =.015, n=3×2=6
F
V=2,000 ×(1 +.015)6−1
.015
=$12,459.1
0
13.
Table factor required =1%
, 48 Periods
1%, 24 Periods: .78757
1
%, 24 Periods: ×.78757
48 Periods .6202665 =.62027 “New” factor 1%, 48 Periods
Present value =.62027 ×1,300 =$806.35
Table factor required =5%
5%, 25 Periods: .29530
1
Present value =.08720 ×100,000 =$8,720.00
SECTION I
Chapter 12: Annuities
12
85461_appB_hr_B1-B48_4.indd 21 9/23/15 4:25 PM
R=9% P=10 F=15.19293
Future value =10,000 ×15.19293 =$151,929.30
Future value =200 ×25.43196 =$5,086.39
B-22 APPENDIX B • WORKED-OUT SOLUTIONS
20. PV =PMT ×
1−(1 +i)−n
i×(1 +i)
i=6%
4=1.5% =.015, n=3×4=12
PV =4,800 ×1−(1 +.015)−12
.015
×(1 +.015) =$63,536.7
8
.032
1.
R=5% P=14 F=9.89864
Amount =300.00 ×9.89864 =$2,969.59
R=7% P=20 F=10.59401
R=2% P=24 F=18.91393
R=1% P=12 F=11.25508
P
.0025
P
1−(1 +i)−n
i
P
P
1−(1 +i)−n
6.
R=11% P=9F=5.53705 +1.00000
Amount =1,400.00 ×6.53705 =$9,151.87
7.
R=1% P=19 F=17.22601 +1.00000
Amount =2,500 ×18.22601 =$45,565.03
8. R=
1
2%P=26 F=24.32402 +1.0000
0
Amount =500.00 ×25.32402 =$12,662.01
R=7% P=17 F=9.76322 +1.00000
.018
SECTION II
18.
P
V=PMT ×
1−(1 +i)−n
i
i
=3%
i
=5.8%
1=5.8% =.058, n=5×1=5
P
V=1,100 ×1−(1 +.058)−5
.058
×(1 +.058) =$4,929.14
21. PV =PMT ×
1−(1 +i)−n
i×(1 +i)
i=4.5%
12 =.375% =.00375, n=4.75 ×12 =57
PV =425 ×1−(1 +.00375)−57
.00375
×(1 +.00375) =$21,856.0
3
85461_appB_hr_B1-B48_4.indd 22 9/23/15 4:25 PM
APPENDIX B • WORKED-OUT SOLUTIONS B-23
1.
R=5% P=16 FV =50,000.00
T
able factor =23.65749
P
ayment =50,000.00
23.65749
=$2,113.50
4.
R
=
1
2%P=18 FV =4,000.0
0
T
able factor =18.78579
P
ayment =4,000.00
18.78579
=$212.93
5.
R=1% P=16 FV =18,750.00
T
able factor =17.25786
P
ayment =18,750.00
17.25786
=$1,086.46
R=2% P=20 PV =5,500.00
T
P
P
19.88798
i
9.
R=3% P=16 PV =13,660.00
T
able factor =12.56110
P
ayment =13,660.00
12.56110
=$1,087.48
10.
R=1% P=18 PV =850.00
Table factor =16.39827
Payment =850.00
16.39827
=$51.83
PMT =5,500 ×.00125
(1
+
.00125)96
−
1
=$53.96
18. PMT =FV ×
i
(1 +i)n−1
i=4%
2=2% =.02, n=3.5 ×2=7
PMT =1,900 ×.02
(1
+
.02)7
−
1
=$255.5
7
19. PMT =PV ×
i
1−(1 +i)−n
i=10.6%
1=10.6% =.106, n=10 ×1=10
1.
R=2% P=24 Payment =4,000.00
Table factor =30.42186
FV =30.42186 ×4,000.00 =$121,687.44
R=5% P=20 Payment =10,000.00
3.
R=5% P=25 Payment =1,850.00
Table factor =47.72710 −1.00000
=46.72710
Assessment Test
SECTION III
85461_appB_hr_B1-B48_4.indd 23 9/23/15 4:26 PM
R=9% P=14 FV =250,000.00
R=1% P=20 FV =1,500.00
T
P
22.01900
B-24 APPENDIX B • WORKED-OUT SOLUTIONS
5.
R=5% P=9 Payment =6,000.00
Table factor =7.10782
PV =7.10782 ×6,000.00 =$42,646.92
9.
R=7% P=13 FV =20,000.00
T
able factor =20.14064
P
ayment =20,000.00
20.14064
=$993.02
10.
R
=
1
2%P=27 FV =7,000.00
T
able factor =28.83037
P
ayment =7,000.00
28.83037
=$242.80
.
21.
F
V=PMT ×
(1 +i)n−1
i
i
=3%
12 =.25% =.0025, n=4×12 =48
F
V=150 ×(1 +.0025)48 −1
.0025
=$7,639.6
8
(1 +i)n−1
F
.015
24. FV =PMT ×
(1 +i)n−1
i×(1 +i)
i=6%
12 =.5% =.005, n=1.5 ×12 =18
PV =375 ×1−(1 +.015)−4
.015
=$1,445.3
9
27. PV =PMT ×
1−(1 +i)−n
i×(1 +i)
i=10%
4=2.5% =.025, n=4×4=16
PV =2,400 ×1−(1 +.025)−16
.025
×(1 +.025) =$32,115.31
28. PV =PMT ×
1−(1 +i)−n
i×(1 +i)
i=4.3%
i=2%
4=.5% =.005, n=3×4=12
PMT =3,600 ×.005
(1 +.005)
12
−1
=$291.84
31. PMT =PV ×
i
1−(1 +i)−n
85461_appB_hr_B1-B48_4.indd 24 9/23/15 4:26 PM
R=1% P=17 Payment =700.00
.005
.00125
1−(1 +i)−n
APPENDIX B • WORKED-OUT SOLUTIONS B-25
36c. Venus
Annuity due: $1,200, 10%, 15 years
Kevin
Annuity due: $1,200, 10%, 15 years
Number of periods =(1 ×15) +1=16
Table factor, annuity due =35.94973 −1.00000 =34.94973
Future value, annuity due =34.94973 ×1,200 =$41,939.68
Rafael
Annuity due: $1,200, 10%, 25 years
Number of periods =(1 ×25) +1=26
Table factor, annuity due =109.18177 −1.00000 =108.18177
Magda
Annuity due: $1,500, 10%, 15 years
Number of periods =(1 ×15) +1=16
Table factor, annuity due =35.94973 −1.00000 =34.94973
Future value, annuity due =34.94973 ×1,500 =$52,424.60
Heather
Annuity due: $1,500, 10%, 30 years
Number of periods =(1 ×30) +1=31
Table factor, annuity due =181.94342 −1,00000 =180.94342
85461_appB_hr_B1-B48_4.indd 25 9/23/15 4:26 PM
Number of periods =(1 ×15) +1=16
Table factor, annuity due =35.94973 −1.00000 =34.94973
Future value, annuity due =34.94973 ×1,200 =$41,939.68
B-26 Appendix B • Worked-out SolutionS
Chapter 13: Consumer and Business
Credit
13.
Dates
Number of
Days Activity
Unpaid
Balance
Daily
Balance
Nov 1–5 5 Previous Balance $550.00 $ 2,750.00
Nov 6–12 7 + 83.20 633.20 4,432.40
14.
Dates
Number of
Days Activity
Unpaid
Balance
Daily
Balance
Oct 1–2 2 Previous Balance $140.00 $ 280.00
Oct 3–6 4 + 50.00 190.00 760.00
15.
Dates
Number of
Days Activity
Unpaid
Balance
Daily
Balance
Feb 1–5 5 Previous Balance $ 69.50 $ 347.50
Feb 6–8 3 − 58.00 11.50 34.50
16.
Dates
Number of
Days Activity
Unpaid
Balance
Daily
Balance
Mar 1–4 4 Previous Balance $324.45 $ 1,297.80
Mar 5–10 6 + 156.79 481.24 2,887.44
13
SECTION I
85461_appB_hr_B1-B48_5.indd 26 9/23/15 4:26 PM
Appendix B • Worked-out SolutionS B-27
19a. SILVER Periodic Rate =
18%
12
=1.5
%
Date Activity Interest New Balance
Purchase
Oct 22 + $3,000.00 $3,000.00
Nov 1 3,000.00
Dates
Number of
Days Activity
Unpaid
Balance
Daily
Balance
Oct 1–21 21 Purchase 0 0
Oct 22–31
10
$3,000.00 $3,000.00
$30,000.00
21
42,304.92
Fin. Ch.
Dec 1–9 9 $34.72 2,049.24 18,443.16
Payment
Dec 10–31
22
1,000.00 1,049.24
23,083.28
31 41,526.44
22
85461_appB_hr_B1-B48_5.indd 27 9/23/15 4:26 PM
B-28 Appendix B • Worked-out SolutionS
Assessment Test
Jan 1–6 6 $480.94 $480.94 2,885.64
balance
5a. Sept 1–3 3 $686.97 $686.97 $2,060.91
Sept 4–7 4 + 223.49 910.46 3,641.84
balance
6a.
P
eriodic rate =7.75% +3.25% =
11%
12
=.92%
Dates
Number of
Days Activity
Unpaid
Balance
Daily
Balance
Jun 1–7 7 $52,900.00 52,900.00 370.300.00
balance
14a.
Amount financed =29,000 −6,000 =$23,000
Total of payments =379 ×120 =$45,480
16a.
$19,995.00 Cost of car
1,299.68 6.5% sales tax
75.00 Tag and title
$21,369.68 Total purchase price
16b.
$21,369.68 Total purchase price
−3,800.00 Down payment
APR table factor for 10.25%, 36 periods is 16.58
Appendix B • Worked-out SolutionS B-29
Chapter 14: Mortgages
14
SECTION I
8.
9%, 15 years table factor =10.15
N
umber of 1,000s financed =
78,500
=78.
5
9.
76,400.00
1,000
=76.4
M
8% for 20 years =8.37 ×76.4
10.
128,000
1,000
=128.
8
M
4.75% for 15 years =7.78 ×128.8
11.
224,500
1,000
=224.
5
5.25% for 30 years =5.53 ×224.5
M
onthly PI =$1,241.49
12.
250,000
1,000
=25
0
13.
164,500
1,000
=164.5
6.75% for 30 years =6.49 ×164.5
14.
140,500
1,000
=140.5
4.25% for 10 years =10.24 ×140.5
4.50% for 25 years =5.56 ×250
B-30 Appendix B • Worked-out SolutionS
Assessment Test
1. Number of 1,000s financed =
155,900.00
1,000
=155.9
2. Number of 1,000s financed =
98,500.00
Monthly PI =54.2 ×5.70 =$308.94
Percent of appraised value =81,200.00 ×.7
=98.5
5.
Monthly PI =162.1 ×8.18 =$1,325.98
Monthly PITI =1,325.98 +2,275.00 +1,033.00
12
=$1,601.6
5
7.
Percent of appraised value =51,500.00 ×.8
=$41,200.00
−36,000.0
0
$20,840.00
9.
Housing expense ratio =
1,288.00
5,300.00 =24.30%
Chapter 15: Financial Statements and Ratios
15
SECTION I
34a. Victory Lane Sporting Goods
Balance Sheet
December 31, 2015
Assets
Current Assets $157,600 67%
Liabilities & Owner’s Equity
Current Liabilities $ 21,200 9%
85461_appB_hr_B1-B48_5.indd 30 9/23/15 4:26 PM
APPENDIX B • WORKED-OUT SOLUTIONS B-31
Victory Lane Sporting Goods
Comparative Balance Sheet
December 31, 2015 and 2016
Increase (Decrease)
Assets 2016 2015 Amount Percent
Current Assets $175,300 $ 157,600 $ 17,700 11.2%
Property, Plant, Equipment 43,600 42,000 1,600 3.8
34b.
Stargate Industries, Inc.
Balance Sheet
June 30, 2015
Assets Percent
Current Assets
Cash $ 44,300 5.5%
Accounts Receivable 127,600 15.8
Merchandise Inventory 88,100 10.9
Prepaid Maintenance 4,100 .5
.5
1.6
20,000
2.5
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable $ 55,700 6.9%
Salaries Payable 23,200 2.9
Notes Payable
38,000
4.7
Total Current Liabilities 116,900 14.5
Long-Term Liabilities
165,000
86,300
35a.
85461_appB_hr_B1-B48_6.indd 31 9/23/15 4:26 PM
39,200
35,700
3,500
51,000
53,400
179,400
160,700
B-32 APPENDIX B • WORKED-OUT SOLUTIONS
Stargate Industries, Inc.
Comparative Balance Sheet
June 30, 2015 and 2016
Increase (Decrease)
Assets 2016 2015 Amount Percent
Current Assets
Cash $ 40,200 $ 44,300 ($4,100) (9.3)%
Accounts Receivable 131,400 127,600 3,800 3.0
Property, Plant, and Equipment
Land 154,000 154,000 0 0
Investments and Other Assets
Investments 36,400 32,000 4,400 13.8
Goodwill
22,000
20,000
2,000
10.0
Total Assets
$813,600
$809,500
$4,100
.5
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable $51,800 $ 55,700 ($3,900) (7.0)
19,000
38,000
Long-Term Liabilities
Mortgage Payable 88,900 91,300 (2,400) (2.6)
Total Liabilities 349,800 373,200 (23,400) (6.3)
Stockholders’ Equity
Common Stock 350,000 350,000 0 0
35b.
85461_appB_hr_B1-B48_6.indd 32 9/23/15 4:26 PM
2,200
APPENDIX B • WORKED-OUT SOLUTIONS B-33
MACY’S, INC.
Comparative Balance Sheet
February 1, 2014 and February 2, 2013
Increase (Decrease)
(in $millions) 2014 2013 Amount Percent
Current Assets
Cash and Cash Equivalents $2,273 $1,836 $437 23.8%
36a.
MACY’S, INC.
Balance Sheet
February 1, 2014
Current Liabilities Percent
Short-Term Debt $463 8.1%
36b.
SECTION II
Jefferson Airplane Parts, Inc.
Income Statement
January 1 to March 31, 2016
Revenue
Gross Sales $240,000 122.1%
Less: Sales Discounts
43,500
22.1
Net Sales $196,500 100.0
Cost of Goods Sold
Merchandise Inventory, Jan. 1 86,400 44.0
14a.
85461_appB_hr_B1-B48_6.indd 33 9/23/15 4:26 PM
B-34 APPENDIX B • WORKED-OUT SOLUTIONS
Jefferson Airplane Parts, Inc.
Comparative Income Statement
First and Second Quarter, 2016
Increase (Decrease)
2nd Quarter 1st Quarter Amount Percent
Revenue
Gross Sales $297,000 $240,000 $57,000 23.8%
Less: Sales Discounts
41,300
43,500
(2,200)
(5.1)
Net Sales 255,700 196,500 59,200 30.1
Cost of Goods Sold
14b.
Sweets & Treats Candy Company, Inc.
Income Statement
For the year ended December 31, 2015
Revenue
Gross Sales $2,249,000 109.6%
Less: Sales Returns and Allowances 143,500 7.0
Sales Discounts
54,290
2.6
Net Sales $2,051,210 100.0
Cost of Goods Sold
11,320
Operating Expenses
Salaries 319,800 15.6
Rent 213,100 10.4
Depreciation 51,200 2.5
15a.
85461_appB_hr_B1-B48_6.indd 34 9/23/15 4:26 PM
84,320
76,900
7,420
96,580
(6,620)
16,400
1,850