PROBLEM 3.10
P= $25,000.00 BEGINNING LOAN INTEREST PRINCIPAL ENDING
i= 12.000% PER YEAR MONTH BALANCE PAYMENT PAYMENT PAYMENT BALANCE
m= 12 MONTHS
n= 4 YEARS 1 $25,000.00 $658.35 $250.00 $408.35 $24,591.65
2 $24,591.65 $658.35 $245.92 $412.43 $24,179.22
aA= $658.35 PER MONTH 3 $24,179.22 $658.35 $241.79 $416.55 $23,762.67
4 $23,762.67 $658.35 $237.63 $420.72 $23,341.95
b
U22=$15,007.13 5 $23,341.95 $658.35 $233.42 $424.93 $22,917.03
6 $22,917.03 $658.35 $229.17 $429.18 $22,487.85
I23=$150.07 7 $22,487.85 $658.35 $224.88 $433.47 $22,054.38
8 $22,054.38 $658.35 $220.54 $437.80 $21,616.58
c
U37=$6,825.49 9 $21,616.58 $658.35 $216.17 $442.18 $21,174.40
10 $21,174.40 $658.35 $211.74 $446.60 $20,727.80
d
PAYOFF42=$4,473.77 11 $20,727.80 $658.35 $207.28 $451.07 $20,276.73
12 $20,276.73 $658.35 $202.77 $455.58 $19,821.15
PAYOFF42=$658.35+$3,815.43 13 $19,821.15 $658.35 $198.21 $460.13 $19,361.02
14 $19,361.02 $658.35 $193.61 $464.74 $18,896.28
15 $18,896.28 $658.35 $188.96 $469.38 $18,426.90
16 $18,426.90 $658.35 $184.27 $474.08 $17,952.82
17 $17,952.82 $658.35 $179.53 $478.82 $17,474.00
18 $17,474.00 $658.35 $174.74 $483.61 $16,990.40
19 $16,990.40 $658.35 $169.90 $488.44 $16,501.96
20 $16,501.96 $658.35 $165.02 $493.33 $16,008.63
21 $16,008.63 $658.35 $160.09 $498.26 $15,510.37
22 $15,510.37 $658.35 $155.10 $503.24 $15,007.13
23 $15,007.13 $658.35 $150.07 $508.27 $14,498.85
24 $14,498.85 $658.35 $144.99 $513.36 $13,985.50
25 $13,985.50 $658.35 $139.85 $518.49 $13,467.01
PROBLEM 3.11
P= $80,000.00 BEGINNING LOAN INTEREST PRINCIPAL ENDING
i= 8.000% PER YEAR QUARTER BALANCE PAYMENT PAYMENT PAYMENT BALANCE
m= 4 QUARTERS
n= 3 YEARS 1 $80,000.00 $7,564.77 $1,600.00 $5,964.77 $74,035.23
2 $74,035.23 $7,564.77 $1,480.70 $6,084.06 $67,951.17
aA= $7,564.77 PER QUARTER 3 $67,951.17 $7,564.77 $1,359.02 $6,205.74 $61,745.42
4 $61,745.42 $7,564.77 $1,234.91 $6,329.86 $55,415.57
b
U5=$48,959.11 5 $55,415.57 $7,564.77 $1,108.31 $6,456.46 $48,959.11
6 $48,959.11 $7,564.77 $979.18 $6,585.59 $42,373.52
I6=$979.18 7 $42,373.52 $7,564.77 $847.47 $6,717.30 $35,656.23
8 $35,656.23 $7,564.77 $713.12 $6,851.64 $28,804.58
c
U6=$42,373.52 9 $28,804.58 $7,564.77 $576.09 $6,988.68 $21,815.91
10 $21,815.91 $7,564.77 $436.32 $7,128.45 $14,687.46
11 $14,687.46 $7,564.77 $293.75 $7,271.02 $7,416.44
12 $7,416.44 $7,564.77 $148.33 $7,416.44 $0.00
PROBLEM 3.12
P= $200,000.00
i= 6.000% PER YEAR
m= 12 MONTHS
n= 7 YEARS
aA= $2,921.71 PER MONTH
b
U24=$151,127.13
ci= 8.500%
U24=$142,407.64 IF LENDER RECEIVES THIS MUCH OR MORE, THEY CAN EARN AT LEAST $2,921.71 PER MONTH
$151,127.13 IF MED DIAGNOSTICS PAYS THIS MUCH OR LESS, THEY WILL BREAK EVEN OR BENEFIT
$8,719.49 X WOULD BE FROM $0 TO $8,719.49
PROBLEM 3.13 METHOD 1 METHOD 2
P= $14,000.00 PRINCIPAL UNPAID UNPAID UNPAID UNPAID
i= 13.000% PER YEAR SOLVER CHANGED CELL BALANCE INTEREST INTEREST INTEREST BALANCE END OF PW OF Δ PW OF
m= 12 MONTHS BEGINNING BEFORE DURING BEFORE AMOUNT LOAN INTEREST PRINCIPAL AFTER AFTER BEGINNING MONTH REMAINING REMAINING PRINCIPAL INTEREST
n1=1YEAR OF MONTH PAYMENT MONTH PAYMENT OWED PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT OF MONTH CASH FLOW PAYMENTS PAYMENTS PAYMENT PAYMENT
n2=3 MORE YEARS
1$14,000.00 $151.67 $151.67 $14,151.67 $0.00 $0.00 $0.00 $151.67 $14,151.67 48 $536.83 $531.08 $531.08 $5.75
aP= $14,000.00 SOLVER TARGET CELL 2 $14,151.67 $153.31 $304.98 $14,304.98 $0.00 $0.00 $0.00 $304.98 $14,304.98 47 $536.83 $1,056.46 $525.38 $525.38 $11.45
3$14,304.98 $154.97 $459.95 $14,459.95 $0.00 $0.00 $0.00 $459.95 $14,459.95 46 $536.83 $1,576.22 $519.75 $519.75 $17.08
A= $536.83 4$14,459.95 $156.65 $616.61 $14,616.61 $0.00 $0.00 $0.00 $616.61 $14,616.61 45 $536.83 $2,090.40 $514.18 $514.18 $22.65
5$14,616.61 $158.35 $774.96 $14,774.96 $0.00 $0.00 $0.00 $774.96 $14,774.96 44 $536.83 $2,599.07 $508.67 $508.67 $28.16
i= 13.000% 6$14,774.96 $160.06 $935.02 $14,935.02 $0.00 $0.00 $0.00 $935.02 $14,935.02 43 $536.83 $3,102.29 $503.22 $503.22 $33.61
7$14,935.02 $161.80 $1,096.82 $15,096.82 $0.00 $0.00 $0.00 $1,096.82 $15,096.82 42 $536.83 $3,600.12 $497.83 $497.83 $39.00
b
ieff=13.803% 8$15,096.82 $163.55 $1,260.37 $15,260.37 $0.00 $0.00 $0.00 $1,260.37 $15,260.37 41 $536.83 $4,092.61 $492.49 $492.49 $44.34
9$15,260.37 $165.32 $1,425.69 $15,425.69 $0.00 $0.00 $0.00 $1,425.69 $15,425.69 40 $536.83 $4,579.83 $487.21 $487.21 $49.62
c Ipmt(14)= $536.83 METHOD 1 10 $15,425.69 $167.11 $1,592.81 $15,592.81 $0.00 $0.00 $0.00 $1,592.81 $15,592.81 39 $536.83 $5,061.82 $481.99 $481.99 $54.84
11 $15,592.81 $168.92 $1,761.73 $15,761.73 $0.00 $0.00 $0.00 $1,761.73 $15,761.73 38 $536.83 $5,538.65 $476.83 $476.83 $60.00
PPmt(14)= $0.00 METHOD 1 12 $15,761.73 $170.75 $1,932.49 $15,932.49 $0.00 $0.00 $0.00 $1,932.49 $15,932.49 37 $536.83 $6,010.37 $471.72 $471.72 $65.11
13 $15,932.49 $172.60 $2,105.09 $16,105.09 $536.83 $536.83 $0.00 $1,568.26 $15,568.26 36 $536.83 $6,477.03 $466.66 $466.66 $70.17
d Ipmt(18)= $223.92 METHOD 1 14 $15,568.26 $168.66 $1,736.92 $15,736.92 $536.83 $536.83 $0.00 $1,200.09 $15,200.09 35 $536.83 $6,938.69 $461.66 $461.66 $75.17
15 $15,200.09 $164.67 $1,364.76 $15,364.76 $536.83 $536.83 $0.00 $827.93 $14,827.93 34 $536.83 $7,395.40 $456.71 $456.71 $80.12
PPmt(18)= $312.91 METHOD 1 16 $14,827.93 $160.64 $988.57 $14,988.57 $536.83 $536.83 $0.00 $451.74 $14,451.74 33 $536.83 $7,847.21 $451.82 $451.82 $85.01
17 $14,451.74 $156.56 $608.30 $14,608.30 $536.83 $536.83 $0.00 $71.47 $14,071.47 32 $536.83 $8,294.19 $446.97 $446.97 $89.86
e Ipmt(22)= $135.51 METHOD 1 18 $14,071.47 $152.44 $223.92 $14,223.92 $536.83 $223.92 $312.91 $0.00 $13,687.09 31 $536.83 $8,736.37 $442.18 $442.18 $94.65
19 $13,687.09 $148.28 $148.28 $13,835.36 $536.83 $148.28 $388.55 $0.00 $13,298.53 30 $536.83 $9,173.82 $437.45 $437.45 $99.38
PPmt(22)= $401.32 METHOD 1 20 $13,298.53 $144.07 $144.07 $13,442.60 $536.83 $144.07 $392.76 $0.00 $12,905.77 29 $536.83 $9,606.58 $432.76 $432.76 $104.07
21 $12,905.77 $139.81 $139.81 $13,045.59 $536.83 $139.81 $397.02 $0.00 $12,508.76 28 $536.83 $10,034.70 $428.12 $428.12 $108.71
22 $12,508.76 $135.51 $135.51 $12,644.27 $536.83 $135.51 $401.32 $0.00 $12,107.44 27 $536.83 $10,458.23 $423.53 $423.53 $113.30
23 $12,107.44 $131.17 $131.17 $12,238.61 $536.83 $131.17 $405.66 $0.00 $11,701.78 26 $536.83 $10,877.22 $418.99 $418.99 $117.84
24 $11,701.78 $126.77 $126.77 $11,828.55 $536.83 $126.77 $410.06 $0.00 $11,291.72 25 $536.83 $11,291.72 $414.50 $414.50 $122.33
25 $11,291.72 $122.33 $122.33 $11,414.05 $536.83 $122.33 $414.50 $0.00 $10,877.22 24 $536.83 $11,701.78 $410.06 $410.06 $126.77
26 $10,877.22 $117.84 $117.84 $10,995.06 $536.83 $117.84 $418.99 $0.00 $10,458.23 23 $536.83 $12,107.44 $405.66 $405.66 $131.17
27 $10,458.23 $113.30 $113.30 $10,571.53 $536.83 $113.30 $423.53 $0.00 $10,034.70 22 $536.83 $12,508.76 $401.32 $401.32 $135.51
28 $10,034.70 $108.71 $108.71 $10,143.41 $536.83 $108.71 $428.12 $0.00 $9,606.58 21 $536.83 $12,905.77 $397.02 $397.02 $139.81
29 $9,606.58 $104.07 $104.07 $9,710.65 $536.83 $104.07 $432.76 $0.00 $9,173.82 20 $536.83 $13,298.53 $392.76 $392.76 $144.07
30 $9,173.82 $99.38 $99.38 $9,273.20 $536.83 $99.38 $437.45 $0.00 $8,736.37 19 $536.83 $13,687.09 $388.55 $388.55 $148.28
31 $8,736.37 $94.65 $94.65 $8,831.02 $536.83 $94.65 $442.18 $0.00 $8,294.19 18 $536.83 $14,071.47 $384.39 $312.91 $223.92
32 $8,294.19 $89.86 $89.86 $8,384.04 $536.83 $89.86 $446.97 $0.00 $7,847.21 17 $536.83 $14,451.74 $380.27 $0.00 $536.83
33 $7,847.21 $85.01 $85.01 $7,932.23 $536.83 $85.01 $451.82 $0.00 $7,395.40 16 $536.83 $14,827.93 $376.19 $0.00 $536.83
34 $7,395.40 $80.12 $80.12 $7,475.52 $536.83 $80.12 $456.71 $0.00 $6,938.69 15 $536.83 $15,200.09 $372.16 $0.00 $536.83
35 $6,938.69 $75.17 $75.17 $7,013.86 $536.83 $75.17 $461.66 $0.00 $6,477.03 14 $536.83 $15,568.26 $368.17 $0.00 $536.83
36 $6,477.03 $70.17 $70.17 $6,547.20 $536.83 $70.17 $466.66 $0.00 $6,010.37 13 $536.83 $15,932.49 $364.23 $0.00 $536.83
37 $6,010.37 $65.11 $65.11 $6,075.48 $536.83 $65.11 $471.72 $0.00 $5,538.65 12 $0.00 $15,932.49 $0.00 $0.00 $0.00
38 $5,538.65 $60.00 $60.00 $5,598.65 $536.83 $60.00 $476.83 $0.00 $5,061.82 11 $0.00 $15,932.49 $0.00 $0.00 $0.00
39 $5,061.82 $54.84 $54.84 $5,116.66 $536.83 $54.84 $481.99 $0.00 $4,579.83 10 $0.00 $15,932.49 $0.00 $0.00 $0.00
40 $4,579.83 $49.62 $49.62 $4,629.44 $536.83 $49.62 $487.21 $0.00 $4,092.61 9$0.00 $15,932.49 $0.00 $0.00 $0.00
41 $4,092.61 $44.34 $44.34 $4,136.95 $536.83 $44.34 $492.49 $0.00 $3,600.12 8$0.00 $15,932.49 $0.00 $0.00 $0.00
42 $3,600.12 $39.00 $39.00 $3,639.12 $536.83 $39.00 $497.83 $0.00 $3,102.29 7$0.00 $15,932.49 $0.00 $0.00 $0.00
43 $3,102.29 $33.61 $33.61 $3,135.90 $536.83 $33.61 $503.22 $0.00 $2,599.07 6$0.00 $15,932.49 $0.00 $0.00 $0.00
44 $2,599.07 $28.16 $28.16 $2,627.23 $536.83 $28.16 $508.67 $0.00 $2,090.40 5$0.00 $15,932.49 $0.00 $0.00 $0.00
45 $2,090.40 $22.65 $22.65 $2,113.05 $536.83 $22.65 $514.18 $0.00 $1,576.22 4$0.00 $15,932.49 $0.00 $0.00 $0.00
46 $1,576.22 $17.08 $17.08 $1,593.29 $536.83 $17.08 $519.75 $0.00 $1,056.46 3$0.00 $15,932.49 $0.00 $0.00 $0.00
47 $1,056.46 $11.45 $11.45 $1,067.91 $536.83 $11.45 $525.38 $0.00 $531.08 2$0.00 $15,932.49 $0.00 $0.00 $0.00
48 $531.08 $5.75 $5.75 $536.83 $536.83 $5.75 $531.08 $0.00 $0.00 1$0.00 $15,932.49 $0.00 $0.00 $0.00
PROBLEM 3.14 METHOD 1 METHOD 2
P= $500,000.00 PRINCIPAL UNPAID UNPAID UNPAID UNPAID
i= 24.000% PER YEAR BALANCE INTEREST INTEREST INTEREST BALANCE END OF PW OF Δ PW OF
m= 12 MONTHS BEGINNING BEFORE DURING BEFORE AMOUNT LOAN INTEREST PRINCIPAL AFTER AFTER BEGINNING MONTH REMAINING REMAINING PRINCIPAL INTEREST
n1=3YEAR OF MONTH PAYMENT MONTH PAYMENT OW ED PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT OF MONTH CASH FLOW PAYMENTS PAYMENTS PAYMENT PAYMENT
n2=3 MORE YEARS
1 $500,000.00 ######### $10,000.00 $510,000.00 $0.00 $0.00 $0.00 $10,000.00 $510,000.00 72 $40,015.30 $39,230.69 $39,230.69 $784.61
a P(36)= $1,019,943.67 2 $510,000.00 ######### $20,200.00 $520,200.00 $0.00 $0.00 $0.00 $20,200.00 $520,200.00 71 $40,015.30 $77,692.14 $38,461.46 $38,461.46 $1,553.84
3 $520,200.00 ######### $30,604.00 $530,604.00 $0.00 $0.00 $0.00 $30,604.00 $530,604.00 70 $40,015.30 $115,399.45 $37,707.31 $37,707.31 $2,307.99
A= $40,015.30 4 $530,604.00 ######### $41,216.08 $541,216.08 $0.00 $0.00 $0.00 $41,216.08 $541,216.08 69 $40,015.30 $152,367.41 $36,967.95 $36,967.95 $3,047.35
5 $541,216.08 ######### $52,040.40 $552,040.40 $0.00 $0.00 $0.00 $52,040.40 $552,040.40 68 $40,015.30 $188,610.50 $36,243.09 $36,243.09 $3,772.21
b TOTAL INT= $940,550.79 6 $552,040.40 ######### $63,081.21 $563,081.21 $0.00 $0.00 $0.00 $63,081.21 $563,081.21 67 $40,015.30 $224,142.94 $35,532.44 $35,532.44 $4,482.86
7 $563,081.21 ######### $74,342.83 $574,342.83 $0.00 $0.00 $0.00 $74,342.83 $574,342.83 66 $40,015.30 $258,978.66 $34,835.73 $34,835.73 $5,179.57
c TOTAL PRINC= $500,000.00 8 $574,342.83 ######### $85,829.69 $585,829.69 $0.00 $0.00 $0.00 $85,829.69 $585,829.69 65 $40,015.30 $293,131.34 $34,152.67 $34,152.67 $5,862.63
9 $585,829.69 ######### $97,546.28 $597,546.28 $0.00 $0.00 $0.00 $97,546.28 $597,546.28 64 $40,015.30 $326,614.35 $33,483.01 $33,483.01 $6,532.29
d PAYOFF AFTER 24TH $423,175.45 10 $597,546.28 ######### ########## $609,497.21 $0.00 $0.00 $0.00 ########## $609,497.21 63 $40,015.30 $359,440.83 $32,826.48 $32,826.48 $7,188.82
11 $609,497.21 ######### ########## $621,687.15 $0.00 $0.00 $0.00 ########## $621,687.15 62 $40,015.30 $391,623.66 $32,182.83 $32,182.83 $7,832.47
12 $621,687.15 ######### ########## $634,120.90 $0.00 $0.00 $0.00 ########## $634,120.90 61 $40,015.30 $423,175.45 $31,551.79 $31,551.79 $8,463.51
13 $634,120.90 ######### ########## $646,803.32 $0.00 $0.00 $0.00 ########## $646,803.32 60 $40,015.30 $454,108.58 $30,933.13 $30,933.13 $9,082.17
14 $646,803.32 ######### ########## $659,739.38 $0.00 $0.00 $0.00 ########## $659,739.38 59 $40,015.30 $484,435.17 $30,326.60 $30,326.60 $9,688.70
15 $659,739.38 ######### ########## $672,934.17 $0.00 $0.00 $0.00 ########## $672,934.17 58 $40,015.30 $514,167.13 $29,731.96 $15,564.83 $24,450.47
16 $672,934.17 ######### ########## $686,392.85 $0.00 $0.00 $0.00 ########## $686,392.85 57 $40,015.30 $543,316.11 $29,148.98 $0.00 $40,015.30
17 $686,392.85 ######### ########## $700,120.71 $0.00 $0.00 $0.00 ########## $700,120.71 56 $40,015.30 $571,893.54 $28,577.43 $0.00 $40,015.30
18 $700,120.71 ######### ########## $714,123.12 $0.00 $0.00 $0.00 ########## $714,123.12 55 $40,015.30 $599,910.62 $28,017.09 $0.00 $40,015.30
19 $714,123.12 ######### ########## $728,405.59 $0.00 $0.00 $0.00 ########## $728,405.59 54 $40,015.30 $627,378.36 $27,467.73 $0.00 $40,015.30
20 $728,405.59 ######### ########## $742,973.70 $0.00 $0.00 $0.00 ########## $742,973.70 53 $40,015.30 $654,307.51 $26,929.15 $0.00 $40,015.30
21 $742,973.70 ######### ########## $757,833.17 $0.00 $0.00 $0.00 ########## $757,833.17 52 $40,015.30 $680,708.63 $26,401.13 $0.00 $40,015.30
22 $757,833.17 ######### ########## $772,989.84 $0.00 $0.00 $0.00 ########## $772,989.84 51 $40,015.30 $706,592.09 $25,883.46 $0.00 $40,015.30
23 $772,989.84 ######### ########## $788,449.63 $0.00 $0.00 $0.00 ########## $788,449.63 50 $40,015.30 $731,968.03 $25,375.94 $0.00 $40,015.30
24 $788,449.63 ######### ########## $804,218.62 $0.00 $0.00 $0.00 ########## $804,218.62 49 $40,015.30 $756,846.40 $24,878.37 $0.00 $40,015.30
25 $804,218.62 ######### ########## $820,303.00 $0.00 $0.00 $0.00 ########## $820,303.00 48 $40,015.30 $781,236.96 $24,390.56 $0.00 $40,015.30
26 $820,303.00 ######### ########## $836,709.06 $0.00 $0.00 $0.00 ########## $836,709.06 47 $40,015.30 $805,149.28 $23,912.31 $0.00 $40,015.30
27 $836,709.06 ######### ########## $853,443.24 $0.00 $0.00 $0.00 ########## $853,443.24 46 $40,015.30 $828,592.72 $23,443.45 $0.00 $40,015.30
28 $853,443.24 ######### ########## $870,512.10 $0.00 $0.00 $0.00 ########## $870,512.10 45 $40,015.30 $851,576.49 $22,983.77 $0.00 $40,015.30
29 $870,512.10 ######### ########## $887,922.35 $0.00 $0.00 $0.00 ########## $887,922.35 44 $40,015.30 $874,109.60 $22,533.11 $0.00 $40,015.30
30 $887,922.35 ######### ########## $905,680.79 $0.00 $0.00 $0.00 ########## $905,680.79 43 $40,015.30 $896,200.88 $22,091.28 $0.00 $40,015.30
31 $905,680.79 ######### ########## $923,794.41 $0.00 $0.00 $0.00 ########## $923,794.41 42 $40,015.30 $917,859.00 $21,658.12 $0.00 $40,015.30
32 $923,794.41 ######### ########## $942,270.30 $0.00 $0.00 $0.00 ########## $942,270.30 41 $40,015.30 $939,092.45 $21,233.45 $0.00 $40,015.30
33 $942,270.30 ######### ########## $961,115.70 $0.00 $0.00 $0.00 ########## $961,115.70 40 $40,015.30 $959,909.56 $20,817.11 $0.00 $40,015.30
34 $961,115.70 ######### ########## $980,338.02 $0.00 $0.00 $0.00 ########## $980,338.02 39 $40,015.30 $980,318.49 $20,408.93 $0.00 $40,015.30
35 $980,338.02 ######### ########## $999,944.78 $0.00 $0.00 $0.00 ########## $999,944.78 38 $40,015.30 $1,000,327.25 $20,008.75 $0.00 $40,015.30
36 $999,944.78 ######### ########## $1,019,943.67 $0.00 $0.00 $0.00 ########## $1,019,943.67 37 $40,015.30 $1,019,943.67 $19,616.43 $0.00 $40,015.30
37 $1,019,943.67 ######### ########## $1,040,342.55 ######### $40,015.30 $0.00 ########## $1,000,327.25 36 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
38 $1,000,327.25 ######### ########## $1,020,333.79 ######### $40,015.30 $0.00 ########## $980,318.49 35 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
39 $980,318.49 ######### ########## $999,924.86 ######### $40,015.30 $0.00 ########## $959,909.56 34 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
40 $959,909.56 ######### ########## $979,107.75 ######### $40,015.30 $0.00 ########## $939,092.45 33 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
41 $939,092.45 ######### ########## $957,874.30 ######### $40,015.30 $0.00 ########## $917,859.00 32 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
42 $917,859.00 ######### ########## $936,216.18 ######### $40,015.30 $0.00 ########## $896,200.88 31 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
43 $896,200.88 ######### ########## $914,124.90 ######### $40,015.30 $0.00 ########## $874,109.60 30 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
44 $874,109.60 ######### ########## $891,591.79 ######### $40,015.30 $0.00 ########## $851,576.49 29 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
45 $851,576.49 ######### ########## $868,608.02 ######### $40,015.30 $0.00 ########## $828,592.72 28 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
46 $828,592.72 ######### ########## $845,164.58 ######### $40,015.30 $0.00 ########## $805,149.28 27 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
47 $805,149.28 ######### ########## $821,252.26 ######### $40,015.30 $0.00 ########## $781,236.96 26 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
48 $781,236.96 ######### ########## $796,861.70 ######### $40,015.30 $0.00 ########## $756,846.40 25 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
49 $756,846.40 ######### ########## $771,983.33 ######### $40,015.30 $0.00 ########## $731,968.03 24 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
50 $731,968.03 ######### ########## $746,607.39 ######### $40,015.30 $0.00 ########## $706,592.09 23 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
51 $706,592.09 ######### ########## $720,723.93 ######### $40,015.30 $0.00 ########## $680,708.63 22 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
52 $680,708.63 ######### ########## $694,322.81 ######### $40,015.30 $0.00 ########## $654,307.51 21 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
53 $654,307.51 ######### ########## $667,393.66 ######### $40,015.30 $0.00 ########## $627,378.36 20 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
54 $627,378.36 ######### ########## $639,925.92 ######### $40,015.30 $0.00 $99,910.62 $599,910.62 19 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
55 $599,910.62 ######### ########## $611,908.84 ######### $40,015.30 $0.00 $71,893.54 $571,893.54 18 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
56 $571,893.54 ######### $83,331.41 $583,331.41 ######### $40,015.30 $0.00 $43,316.11 $543,316.11 17 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
57 $543,316.11 ######### $54,182.43 $554,182.43 ######### $40,015.30 $0.00 $14,167.13 $514,167.13 16 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
58 $514,167.13 ######### $24,450.47 $524,450.47 ######### $24,450.47 $15,564.83 $0.00 $484,435.17 15 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
59 $484,435.17 $9,688.70 $9,688.70 $494,123.88 ######### $9,688.70 $30,326.60 $0.00 $454,108.58 14 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
60 $454,108.58 $9,082.17 $9,082.17 $463,190.75 ######### $9,082.17 $30,933.13 $0.00 $423,175.45 13 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
61 $423,175.45 $8,463.51 $8,463.51 $431,638.96 ######### $8,463.51 $31,551.79 $0.00 $391,623.66 12 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
62 $391,623.66 $7,832.47 $7,832.47 $399,456.13 ######### $7,832.47 $32,182.83 $0.00 $359,440.83 11 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
63 $359,440.83 $7,188.82 $7,188.82 $366,629.65 ######### $7,188.82 $32,826.48 $0.00 $326,614.35 10 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
64 $326,614.35 $6,532.29 $6,532.29 $333,146.64 ######### $6,532.29 $33,483.01 $0.00 $293,131.34 9 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
65 $293,131.34 $5,862.63 $5,862.63 $298,993.96 ######### $5,862.63 $34,152.67 $0.00 $258,978.66 8 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
66 $258,978.66 $5,179.57 $5,179.57 $264,158.24 ######### $5,179.57 $34,835.73 $0.00 $224,142.94 7 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
67 $224,142.94 $4,482.86 $4,482.86 $228,625.79 ######### $4,482.86 $35,532.44 $0.00 $188,610.50 6 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
68 $188,610.50 $3,772.21 $3,772.21 $192,382.70 ######### $3,772.21 $36,243.09 $0.00 $152,367.41 5 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
69 $152,367.41 $3,047.35 $3,047.35 $155,414.75 ######### $3,047.35 $36,967.95 $0.00 $115,399.45 4 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
70 $115,399.45 $2,307.99 $2,307.99 $117,707.44 ######### $2,307.99 $37,707.31 $0.00 $77,692.14 3 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
71 $77,692.14 $1,553.84 $1,553.84 $79,245.99 ######### $1,553.84 $38,461.46 $0.00 $39,230.69 2 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
72 $39,230.69 $784.61 $784.61 $40,015.30 ######### $784.61 $39,230.69 $0.00 $0.00 1 $0.00 $1,019,943.67 $0.00 $0.00 $0.00
SUM ########## ########## SUM ########## ##########
PROBLEM 3.15
METHOD 1 METHOD 2
P= $100,000.00 PRINCIPAL UNPAID UNPAID UNPAID UNPAID
i= 6.000% PER YEAR BALANCE INTEREST INTEREST INTEREST BALANCE END OF PW OF Δ PW OF
m= 1 # PAYMENTS/YR BEGINNING BEFORE DURING BEFORE AMOUNT LOAN INTEREST PRINCIPAL AFTER AFTER BEGINNING YEAR REMAINING REMAINING PRINCIPAL INTEREST
n1=3 DEFERMENT OF YEAR PAYMENT YEAR PAYMENT OWED PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT OF YEAR CASH FLOW PAYMENTS PAYMENTS PAYMENT PAYMENT
n2=10 MORE YEARS
1 $100,000.00 $6,000.00 $6,000.00 $106,000.00 $0.00 $0.00 $0.00 $6,000.00 $106,000.00 13 $16,182.09 $15,266.12 $15,266.12 $915.97
a A = $13,586.80 =-PMT(C4,C7,C3) 2 $106,000.00 $6,360.00 $12,360.00 $112,360.00 $0.00 $0.00 $0.00 $12,360.00 $112,360.00 12 $16,182.09 $29,668.13 $14,402.00 $14,402.00 $1,780.09
3 $112,360.00 $6,741.60 $19,101.60 $119,101.60 $0.00 $0.00 $0.00 $19,101.60 $119,101.60 11 $16,182.09 $43,254.92 $13,586.80 $13,586.80 $2,595.30
I3 = $5,062.27 =IPMT(C4,3,C7,-C3) 4 $119,101.60 $7,146.10 $26,247.70 $126,247.70 ######### $16,182.09 $0.00 $10,065.60 $110,065.60 10 $16,182.09 $56,072.66 $12,817.73 $12,817.73 $3,364.36
5 $110,065.60 $6,603.94 $16,669.54 $116,669.54 ######### $16,182.09 $0.00 $487.45 $100,487.45 9 $16,182.09 $68,164.85 $12,092.20 $12,092.20 $4,089.89
I3 = $13,586.80[1 – (P|F 6%,10-3+1)] 6 $100,487.45 $6,029.25 $6,516.70 $106,516.70 ######### $6,516.70 $9,665.39 $0.00 $90,334.61 8 $16,182.09 $79,572.59 $11,407.74 $11,407.74 $4,774.36
I3 = $13,586.80[1 – (0.62741)] 7 $90,334.61 $5,420.08 $5,420.08 $95,754.68 ######### $5,420.08 $10,762.01 $0.00 $79,572.59 7 $16,182.09 $90,334.61 $10,762.01 $10,762.01 $5,420.08
I3 = $5,062.31 8 $79,572.59 $4,774.36 $4,774.36 $84,346.95 ######### $4,774.36 $11,407.74 $0.00 $68,164.85 6 $16,182.09 $100,487.45 $10,152.84 $9,665.39 $6,516.70
9 $68,164.85 $4,089.89 $4,089.89 $72,254.75 ######### $4,089.89 $12,092.20 $0.00 $56,072.66 5 $16,182.09 $110,065.60 $9,578.15 $0.00 $16,182.09
b A = $16,182.09 =PMT(C4,C7,FV(C4,C6,,C3)) 10 $56,072.66 $3,364.36 $3,364.36 $59,437.01 ######### $3,364.36 $12,817.73 $0.00 $43,254.92 4 $16,182.09 $119,101.60 $9,036.00 $0.00 $16,182.09
11 $43,254.92 $2,595.30 $2,595.30 $45,850.22 ######### $2,595.30 $13,586.80 $0.00 $29,668.13 3 $0.00 $119,101.60 $0.00 $0.00 $0.00
I1 = $16,182.09 12 $29,668.13 $1,780.09 $1,780.09 $31,448.21 ######### $1,780.09 $14,402.00 $0.00 $15,266.12 2 $0.00 $119,101.60 $0.00 $0.00 $0.00
13 $15,266.12 $915.97 $915.97 $16,182.09 ######### $915.97 $15,266.12 $0.00 ($0.00) 1 $0.00 $119,101.60 $0.00 $0.00 $0.00
c
I10 = $915.97
SUM $61,820.91 ########## SUM ########## $61,820.91
PROBLEM 3.16
P= $25,000.00 PRINCIPAL UNPAID UNPAID UNPAID UNPAID
i= 8.000% PER YEAR BALANCE INTEREST INTEREST INTEREST BALANCE
m= 1 # PAYMENTS/YR BEGINNING BEFORE DURING BEFORE AMOUNT LOAN INTEREST PRINCIPAL AFTER AFTER
n1=0 DEFERMENT OF YEAR PAYMENT YEAR PAYMENT OWED PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT
n2=5 MORE YEARS
1 $25,000.00 $2,000.00 $2,000.00 $27,000.00 $5,338.18 $2,000.00 $3,338.18 $0.00 $21,661.82
A1 = $5,338.18 SOLVER TARGET CELL 2 $21,661.82 $1,732.95 $1,732.95 $23,394.77 $5,838.18 $1,732.95 $4,105.23 $0.00 $17,556.59
3 $17,556.59 $1,404.53 $1,404.53 $18,961.12 $6,338.18 $1,404.53 $4,933.65 $0.00 $12,622.95
$0.00 =NPV(C4,C9,C9+500,C9+1000,C9+1500,C9+2000)-C3 4 $12,622.95 $1,009.84 $1,009.84 $13,632.78 $6,838.18 $1,009.84 $5,828.34 $0.00 $6,794.61
5 $6,794.61 $543.57 $543.57 $7,338.18 $7,338.18 $543.57 $6,794.61 $0.00 $0.00
E2 = $4,105.23
SUM $6,690.88 $25,000.00 SUM $0.00 $0.00
PROBLEM 3.21
PROBLEM 3.17
P= $25,000.00 PRINCIPAL UNPAID UNPAID UNPAID UNPAID
i= 8.000% PER YEAR BALANCE INTEREST INTEREST INTEREST BALANCE
m= 1 # PAYMENTS/YR
BEGINNING
BEFORE DURING BEFORE AMOUNT LOAN INTEREST PRINCIPAL AFTER AFTER
n1=0 DEFERMENT OF YEAR PAYMENT YEAR PAYMENT OWED PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT
n2=5 MORE YEARS
1 $25,000.00 $2,000.00 $2,000.00 $27,000.00 $5,203.67 $2,000.00 $3,203.67 $0.00 $21,796.33
A1 = $5,203.67 SOLVER TARGET CELL 2 $21,796.33 $1,743.71 $1,743.71 $23,540.04 $5,724.04 $1,743.71 $3,980.33 $0.00 $17,816.00
3 $17,816.00 $1,425.28 $1,425.28 $19,241.28 $6,296.44 $1,425.28 $4,871.16 $0.00 $12,944.84
$0.00
=NPV(C4,C9,C9*1.1,C9*1.1^2,C9*1.1^3,C9*1.1^4)-C
4 $12,944.84 $1,035.59 $1,035.59 $13,980.43 $6,926.08 $1,035.59 $5,890.50 $0.00 $7,054.34
5 $7,054.34 $564.35 $564.35 $7,618.69 $7,618.69 $564.35 $7,054.34 $0.00 $0.00
E2 = $3,980.33
SUM $6,768.92 $25,000.00 SUM $0.00 $0.00
PROBLEM 3.18
FACE/PAR VALUE= $5,000.00
BOND RATE= 12.00% PER YEAR
PAYMENTS/YR= 2 SEMIANNUAL
n= 7 YEARS
SELLING PRICE= $6,056.31 SOLVER CHANGED CELL 1
DESIRED RATE 8.00% PER YEAR NOMINAL
ACTUAL RATE= 8.00% PER YEAR NOMINAL SOLVER CHANGED CELL 2
METHOD 1 PW= $0.00 EXCEL SOLVER TARGET CELL 1
METHOD 2 PW= $0.02 TABLES -6,056.31+0.06*5,000*(P|A 4%,14)+5,000*(P|F 4%,14)
CHECK PW= $0.00 ACTUAL RATE = 8.00% SOLVER TARGET CELL 2
OR 4.00% PER SIX MONTHS
WHEN PURCHASED AT $6,056.31
THE BUYER SHOULD BE WILLING TO PAY $6,056.31 OR LESS
NOTE THAT THE $7,000 ORIGINALLY PAID FOR IT IS IRRELEVANT AS WORDED
PROBLEM 3.19
FACE/PAR VALUE= $10,000.00
BOND RATE= 6.60% PER YEAR
PAYMENTS/YR= 2 SEMIANNUAL
n= 5 YEARS
PURCHASE PRICE= $9,500.00
SELLING PRICE= $12,663.39
SOLVER CHANGED CELL
DESIRED RATE 12.00% PER YEAR NOMINAL
METHOD 1 PW= $0.00 EXCEL SOLVER TARGET CELL
METHOD 2 PW= -$0.06 TABLES -9,500+0.033*10,000*(P|A 6%,10)+12,663.39*(P|F 6%,10)
YOUR MINIMUM SELLING PRICE WILL BE $12,663.39
PROBLEM 3.20
FACE/PAR VALUE= $1,000.00
BOND RATE= 10.00% PER YEAR SOLVER CHANGED CELL
PAYMENTS/YR= 4 QUARTERLY
n= 7 YEARS
PURCHASE PRICE= $750.08
DESIRED RATE 16.00% PER YEAR NOMINAL
PW= $0.00 EXCEL SOLVER TARGET CELL
THE BOND COUPON RATE IS 10.00% NOMINAL ANNUAL
PROBLEM 3.21
FACE/PAR VALUE= $10,000.00
BOND RATE= 6.00% PER YEAR
PAYMENTS/YR= 4 QUARTERLY
n= 3 YEARS
PURCHASE PRICE= $8,366.62 SOLVER CHANGED CELL
SELLING PRICE= $9,800.00
ACTUAL RATE 12.00% PER YEAR NOMINAL
PW= $0.00 EXCEL SOLVER TARGET CELL
PW= $0.00 TABLES -8,366.62+0.015*10,000*(P|A 3%,12)+9,800*(P|F 3%,12)
THE PURCHASE PRICE WAS $8,366.62
PROBLEM 3.22
$0.08*X
FACE/PAR VALUE= $9,000.00 SOLVER CHANGED CELL $500+X
BOND RATE= 8.00% PER YEAR
PAYMENTS/YR= 1 ANNUAL
n= 5 YEARS
PURCHASE PRICE= $8,628.12
SELLING PRICE= $9,500.00 $0.08*X $0.08*X $0.08*X $0.08*X
ACTUAL RATE 10.00% PER YEAR
0 1 2 3 4 5
PW= $0.00 EXCEL SOLVER TARGET CELL
PW= -$0.01 TABLES -8,628.12+0.08*9,000*(P|A 10%,5)+9,500*(P|F 10%,5) PAR= $9,000.00
THE PAR VALUE IS $9,000 FOR ALL 8 BONDS
-$8,628.12
PROBLEM 3.23 $0.08*X
$X-500
FACE/PAR VALUE= $11,000.00 SOLVER CHANGED CELL
BOND RATE= 8.00% PER YEAR
PAYMENTS/YR= 1 ANNUAL
n= 5 YEARS
PURCHASE PRICE= $9,855.57
SELLING PRICE= $10,500.00 $0.08*X $0.08*X $0.08*X $0.08*X
ACTUAL RATE 10.00% PER YEAR
0 1 2 3 4 5
PW= $0.00 EXCEL SOLVER TARGET CELL
PW= -$0.01 TABLES -9,855.57+0.08*11,000*(P|A 10%,5)+10,500*(P|F 10%,5)
THE PAR VALUE IS $11,000 FOR ALL 10 BONDS
-$9,855.57
PROBLEM 3.24
FACE/PAR VALUE= $20,000.00
BOND RATE= 6.00% PER YEAR
PAYMENTS/YR= 2 SEMIANNUAL
n= 5 YEARS
PURCHASE PRICE= $18,000.00 SOLVER USED
ACTUAL RATE 8.4964% PER YEAR SOLVER CHANGED CELL NOMINAL
PW= $0.00 EXCEL SOLVER TARGET CELL
PW= -$0.04 TABLES -18,000+0.03*20,000*(P|A 8.4964%,10)+20,000*(P|F 8.4964%,10)
YOU SHOULD BUY THIS BOND SINCE IT EARNS A NOMINAL RATE OF 8.4964%
PROBLEM 3.25
FACE/PAR VALUE= $1,000.00
BOND RATE= 10.002% PER YEAR SOLVER CHANGED CELL
PAYMENTS/YR= 1 ANNUAL
n= 3YEARS
PURCHASE PRICE= $952.00 SOLVER USED
EARNED RATE= 12.0000% PER YEAR
PW= $0.00 EXCEL SOLVER TARGET CELL
PW= $0.00 TABLES -1142.38+0.12*1200*(P|A 12%,3)+1200*(P|F 12%,3)
COUPON RATE = 10.002%