Loan Amount 30000

Annual Interest Rate 0.1

Loan Period in years 20
No. of payment in a year 1
PMT= $3,523.79

Pmt No. Beg Balance Payment Interest Pmt Principal Pmt Ending Balance
1 30000 3523.79 $3,000.00 $523.79 $29,476.21
2 $29,476.21 3523.79 $2,947.62 $576.17 $28,900.04
3 $28,900.04 3523.79 $2,890.00 $633.78 $28,266.26
4 $28,266.26 3523.79 $2,826.63 $697.16 $27,569.10
5 $27,569.10 3523.79 $2,756.91 $766.88 $26,802.22
6 $26,802.22 3523.79 $2,680.22 $843.57 $25,958.65
7 $25,958.65 3523.79 $2,595.87 $927.92 $25,030.73
8 $25,030.73 3523.79 $2,503.07 $1,020.72 $24,010.01
9 $24,010.01 3523.79 $2,401.00 $1,122.79 $22,887.22
10 $22,887.22 3523.79 $2,288.72 $1,235.07 $21,652.16
11 $21,652.16 3523.79 $2,165.22 $1,358.57 $20,293.58
12 $20,293.58 3523.79 $2,029.36 $1,494.43 $18,799.15
13 $18,799.15 3523.79 $1,879.92 $1,643.87 $17,155.28
14 $17,155.28 3523.79 $1,715.53 $1,808.26 $15,347.02
15 $15,347.02 3523.79 $1,534.70 $1,989.09 $13,357.93
16 $13,357.93 3523.79 $1,335.79 $2,188.00 $11,169.94
17 $11,169.94 3523.79 $1,116.99 $2,406.80 $8,763.14
18 $8,763.14 3523.79 $876.31 $2,647.47 $6,115.67
19 $6,115.67 3523.79 $611.57 $2,912.22 $3,203.44
20 $3,203.44 3523.79 $320.34 $3,203.44 ($0.00)

Loan Amount 60000

Annual Interest Rate 0.1
Loan Period in years 8
No. of payment in a year 12
PMT= $910.45

Pmt No. Beg Balance Payment Interest Pmt Principal Pmt Ending Balance
1 60000 910.45 $500.00 $410.45 $59,589.55
2 $59,589.55 910.45 $496.58 $413.87 $59,175.68
3 $59,175.68 910.45 $493.13 $417.32 $58,758.36
4 $58,758.36 910.45 $489.65 $420.80 $58,337.56
5 $58,337.56 910.45 $486.15 $424.30 $57,913.26
6 $57,913.26 910.45 $482.61 $427.84 $57,485.42
7 $57,485.42 910.45 $479.05 $431.40 $57,054.02
8 $57,054.02 910.45 $475.45 $435.00 $56,619.02
9 $56,619.02 910.45 $471.83 $438.62 $56,180.39
10 $56,180.39 910.45 $468.17 $442.28 $55,738.11
11 $55,738.11 910.45 $464.48 $445.97 $55,292.15
12 $55,292.15 910.45 $460.77 $449.68 $54,842.46
13 $54,842.46 910.45 $457.02 $453.43 $54,389.04
14 $54,389.04 910.45 $453.24 $457.21 $53,931.83
15 $53,931.83 910.45 $449.43 $461.02 $53,470.81
16 $53,470.81 910.45 $445.59 $464.86 $53,005.95
17 $53,005.95 910.45 $441.72 $468.73 $52,537.22
18 $52,537.22 910.45 $437.81 $472.64 $52,064.58
19 $52,064.58 910.45 $433.87 $476.58 $51,588.00
20 $51,588.00 910.45 $429.90 $480.55 $51,107.45
21 $51,107.45 910.45 $425.90 $484.55 $50,622.89
22 $50,622.89 910.45 $421.86 $488.59 $50,134.30
23 $50,134.30 910.45 $417.79 $492.66 $49,641.64
24 $49,641.64 910.45 $413.68 $496.77 $49,144.87
25 $49,144.87 910.45 $409.54 $500.91 $48,643.96
26 $48,643.96 910.45 $405.37 $505.08 $48,138.87
27 $48,138.87 910.45 $401.16 $509.29 $47,629.58
28 $47,629.58 910.45 $396.91 $513.54 $47,116.05
29 $47,116.05 910.45 $392.63 $517.82 $46,598.23
30 $46,598.23 910.45 $388.32 $522.13 $46,076.10
31 $46,076.10 910.45 $383.97 $526.48 $45,549.62
32 $45,549.62 910.45 $379.58 $530.87 $45,018.75
33 $45,018.75 910.45 $375.16 $535.29 $44,483.45
34 $44,483.45 910.45 $370.70 $539.75 $43,943.70
35 $43,943.70 910.45 $366.20 $544.25 $43,399.45
36 $43,399.45 910.45 $361.66 $548.79 $42,850.66
37 $42,850.66 910.45 $357.09 $553.36 $42,297.30
38 $42,297.30 910.45 $352.48 $557.97 $41,739.32
39 $41,739.32 910.45 $347.83 $562.62 $41,176.70
40 $41,176.70 910.45 $343.14 $567.31 $40,609.39
41 $40,609.39 910.45 $338.41 $572.04 $40,037.35
42 $40,037.35 910.45 $333.64 $576.81 $39,460.55
43 $39,460.55 910.45 $328.84 $581.61 $38,878.94
44 $38,878.94 910.45 $323.99 $586.46 $38,292.48
45 $38,292.48 910.45 $319.10 $591.35 $37,701.13
46 $37,701.13 910.45 $314.18 $596.27 $37,104.86
47 $37,104.86 910.45 $309.21 $601.24 $36,503.62
48 $36,503.62 910.45 $304.20 $606.25 $35,897.36
49 $35,897.36 910.45 $299.14 $611.31 $35,286.06
50 $35,286.06 910.45 $294.05 $616.40 $34,669.66
51 $34,669.66 910.45 $288.91 $621.54 $34,048.12
52 $34,048.12 910.45 $283.73 $626.72 $33,421.41
53 $33,421.41 910.45 $278.51 $631.94 $32,789.47
54 $32,789.47 910.45 $273.25 $637.20 $32,152.26
55 $32,152.26 910.45 $267.94 $642.51 $31,509.75
56 $31,509.75 910.45 $262.58 $647.87 $30,861.88
57 $30,861.88 910.45 $257.18 $653.27 $30,208.61
58 $30,208.61 910.45 $251.74 $658.71 $29,549.90
59 $29,549.90 910.45 $246.25 $664.20 $28,885.70
60 $28,885.70 910.45 $240.71 $669.74 $28,215.97
61 $28,215.97 910.45 $235.13 $675.32 $27,540.65
62 $27,540.65 910.45 $229.51 $680.94 $26,859.70
63 $26,859.70 910.45 $223.83 $686.62 $26,173.09
64 $26,173.09 910.45 $218.11 $692.34 $25,480.74
65 $25,480.74 910.45 $212.34 $698.11 $24,782.63
66 $24,782.63 910.45 $206.52 $703.93 $24,078.71
67 $24,078.71 910.45 $200.66 $709.79 $23,368.91
68 $23,368.91 910.45 $194.74 $715.71 $22,653.20
69 $22,653.20 910.45 $188.78 $721.67 $21,931.53
70 $21,931.53 910.45 $182.76 $727.69 $21,203.84
71 $21,203.84 910.45 $176.70 $733.75 $20,470.09
72 $20,470.09 910.45 $170.58 $739.87 $19,730.23
73 $19,730.23 910.45 $164.42 $746.03 $18,984.20
74 $18,984.20 910.45 $158.20 $752.25 $18,231.95
75 $18,231.95 910.45 $151.93 $758.52 $17,473.43
76 $17,473.43 910.45 $145.61 $764.84 $16,708.59
77 $16,708.59 910.45 $139.24 $771.21 $15,937.38
78 $15,937.38 910.45 $132.81 $777.64 $15,159.74
79 $15,159.74 910.45 $126.33 $784.12 $14,375.62
80 $14,375.62 910.45 $119.80 $790.65 $13,584.97
81 $13,584.97 910.45 $113.21 $797.24 $12,787.73
82 $12,787.73 910.45 $106.56 $803.89 $11,983.84
83 $11,983.84 910.45 $99.87 $810.58 $11,173.26
84 $11,173.26 910.45 $93.11 $817.34 $10,355.92
85 $10,355.92 910.45 $86.30 $824.15 $9,531.77
86 $9,531.77 910.45 $79.43 $831.02 $8,700.75
87 $8,700.75 910.45 $72.51 $837.94 $7,862.81
88 $7,862.81 910.45 $65.52 $844.93 $7,017.88
89 $7,017.88 910.45 $58.48 $851.97 $6,165.91
90 $6,165.91 910.45 $51.38 $859.07 $5,306.85
91 $5,306.85 910.45 $44.22 $866.23 $4,440.62
92 $4,440.62 910.45 $37.01 $873.44 $3,567.17
93 $3,567.17 910.45 $29.73 $880.72 $2,686.45
94 $2,686.45 910.45 $22.39 $888.06 $1,798.39
95 $1,798.39 910.45 $14.99 $895.46 $902.93
96 $902.93 910.45 $7.52 $902.93 $0.00
Cumulative Int
$3,000.00
$5,947.62
$8,837.63
$11,664.25
$14,421.16
$17,101.38
$19,697.25
$22,200.32
$24,601.32
$26,890.04
$29,055.26
$31,084.62
$32,964.53
$34,680.06
$36,214.76
$37,550.56
$38,667.55
$39,543.86
$40,155.43
$40,475.77

Cumulative Int
$500.00
$996.58
$1,489.71
$1,979.36
 $2,465.51
$2,948.12
$3,427.17
$3,902.62
$4,374.44
$4,842.61
$5,307.09
$5,767.86
$6,224.88
$6,678.13
$7,127.56
$7,573.15
$8,014.86
$8,452.67
$8,886.54
$9,316.44
$9,742.34
$10,164.20
$10,581.98
$10,995.66
$11,405.20
$11,810.57
$12,211.73
$12,608.64
$13,001.28
$13,389.59
$13,773.56
$14,153.14
$14,528.30
$14,898.99
$15,265.19
$15,626.85
$15,983.94
$16,336.42
$16,684.25
$17,027.39
$17,365.80
$17,699.44
$18,028.28
$18,352.27
$18,671.37
$18,985.55
$19,294.76
$19,598.95
$19,898.10
$20,192.15
$20,481.06
$20,764.80
$21,043.31
$21,316.56
$21,584.49
$21,847.07
$22,104.25
$22,355.99
$22,602.24
$22,842.96
$23,078.09
$23,307.59
$23,531.43
$23,749.53
$23,961.87
$24,168.40
$24,369.05
$24,563.79
$24,752.57
$24,935.33
$25,112.03
$25,282.62
$25,447.03
$25,605.24
$25,757.17
$25,902.78
$26,042.02
$26,174.83
$26,301.16
$26,420.96
$26,534.17
$26,640.73
$26,740.60
$26,833.71
$26,920.01
$26,999.44
$27,071.94
$27,137.47
$27,195.95
$27,247.33
$27,291.56
$27,328.56
$27,358.29
$27,380.67
$27,395.66
$27,403.19
Problem#2
Bank's EAR

Nominal Rate 0.15

m= 12

EAR= 16.08%

For Sue Sharp,

EAR= 16.08%
m= 4

Nominal Rate 15.19%

Problem 3
a.
Collage year Year from now Current cost Inflation Expected cost
1 5 12500 0.05 15953.52
2 6 12500 0.05 16751.20
3 7 12500 0.05 17588.76
4 8 12500 0.05 18468.19
PV at beginning $61,204.06

b.
PV= 7500
r= 0.08
n= 5
m= 1
PMT= 0

FV= ($11,019.96)

c.
Additional fund required to meet the educational expense

r 0.08
n 6
m 1
fv 50184.09

PMT= ($6,840.86)

Problem 4
a.
PV= 0
PMT= -500
r= 0.1
n= 30
m= 2

FVA= $176,791.86

b.
Value of 10,000 that withdrawl 10 years age:

PV= -10000
r 0.1
n 10
m 2
PMT= 0
FV= $26,532.98

So, retirement fund balance= $150,258.88

Problrm 5:
FV= 0
PV= 85000
n 30
m 1
PMT= -8273.59

r= 9.00%

Since it is annually compounding problem, thus APR=PR =EAR.

Problrm 6:

FV= 0 0 0
PV= 3310 3310 3310
r 0.18 0.18 0.18
m 12 12 12
PMT -150 -222 -360

n= 26.51 16.72 9.81 months

Problem 7
a. b.
FV= 0 0
PV= 95000 95000
r 0.09 0.09
n 20 10
m 12 12

PMT= ($854.74) ($1,203.42)

Problem 8
First City Bank Second City Bank
nominal rate 0.07 0.065
m 1 4

EAR= 7.00% 6.66%

Discounting Factor PV at beginng
0.08 15953.52
0.08 15510.37
0.08 15079.52
0.08 14660.65
61204.06

$50,184.09
c.
FV= 0
PV= 95000
r= 0.09
m= 12
PMT= -985

n= 171.98 months 14.33 years

B. (1) B. (2)

PV= -100 PV=

FV= FV= 100
PMT= 0 PMT= 0
r= 0.1 r= 0.1
n= 3 n= 3
m= 1 m= 1
Type= 0 Type= 0

FV= $133.10 PV= ($75.13)

PV= -100
FV= 300
PMT= 0
r= 0.2
n=
m= 1
Type= 0

Nper= 6.026 Years

E. (1) E. (2) E3.

PV= 0 PV= PV= 0

FV= FV= 0 FV=
PMT= -100 PMT= -100 PMT= -100
r= 0.1 r= 0.1 r= 0.1
n= 3 n= 3 n= 3
m= 1 m= 1 m= 1
Type= 0 Type= 0 Type= 1

FVA= $331.00 PVA= $248.69 FVA= $364.10

F. CF1 100
CF2 300
CF3 300
CF4 -50
r= 0.1
$530.09
G.

PV= 100
FV= -125.97
PMT= 0
r=
n= 3
m= 1
Type= 0

r= 8.00%

H. (3) H. (4)

Nom, Rate 0.1 0.1 0.1 PV= -100

m 2 4 365 FV=
PMT= 0
Effective= 10.25% 10.38% 10.52% r= 0.1
n= 3
m= 2
Type= 0

FV= $134.01

J. (1) J. (2)

nom= 0.1 PV= 0 PV=

m- 2 FV= FV= 0
effect. r= 0.1025 PMT= -100 PMT= -100
r= 0.1025 r= 0.1025
n= 3 n= 3
m= 1 m= 1
Type= 0 Type= 0

FVA= $331.80 PVA= $247.59

K.
FV= 0
Loan Amount (PV) 1000
Annual Interest Rate (r) 0.1
Loan Period in years (n) 3
No. of payment in a year (m) 1
PMT= $402.11

Pmt No. Beg BalancePayment Interest Pmt Principal Pmt Ending Bala Cumulative Int
1 1000 402.11 $100.00 $302.11 $697.89 $100.00
2 $697.89 402.11 $69.79 $332.33 $365.56 $169.79
3 $365.56 402.11 $36.56 $365.56 $0.00 $206.34

L.
Alternatively
nom= 0.1133463 PV= -100 PV= -100
m- 365 FV= FV=
effect. r= 0.12 PMT= 0 PMT= 0
r= 0.12 r= 0.1133463
n= 0.75 n= 0.75
m= 1 m= 365
Type= 0 Type= 0

FV= $108.87 FV= $108.87

M.
Alternatively
nom= 0.1133463 PV= -100 PV= -100
m- 365 FV= FV=
effect. r= 0.12 PMT= 0 PMT= 0
r= 0.12 r= 0.1133463
n= 1.75 n= 1.75
m= 1 m= 365
Type= 0 Type= 0

FV= $121.94 FV= $121.94

N.

Alternatively
nom= 0.0676649 PV= -850 PV= -850
m- 365 FV= FV=
effect. r= 0.07 PMT= 0 PMT= 0
r= 0.07 r= 0.0676649
n= 1.25 n= 1.25
 m= 1 m= 365
Type= 0 Type= 0

FV= $925.01 FV= $925.01

Note FV is greater than the Bank 1000>925.01

Alternatively
PV= PV=
FV= 1000 FV= 1000
PMT= 0 PMT= 0
r= 0.07 r= 0.0676649
n= 1.25 n= 1.25
m= 1 m= 365
Type= 0 Type= 0

PV= ($918.90) PV= ($918.90)

Note price 850 <918.90

PV= -850
FV= 1000
PMT= 0
r=
n= 1.25
m= 1
Type= 0

r= 13.88%
PV=
FV= 0
PMT= -100
r= 0.1
n= 3
m= 1
Type= 1

PVA= $273.55
PV= -100
FV=
PMT= 0
r= 0.1
n= 3
m= 4
Type= 0

FV= $134.49