Alexander Merejildo Tomalá

Task #4 Economic Engineering

47. When purchasing a television valued at $3,000.00, $1,500 is paid in cash and a document is
signed for the difference to be paid in 6 months with an interest of 2% per month. What is the
amount of the document?

P=3000−1500 F=? i=0.02 mensual n=6 meses

n 6
F=P(i+1) =1500(0.02+1) =$ 1689.24
48. The buyer in the previous case decides to pay the balance with two equal installments of 3
and 6 months. What is the amount of these payments if interest of 6% quarterly is considered?

P=1500 n1=1trimestre i=0.06 trimestral n2 =2trimestre

1500

0 1 2
x x

−n1 −n2
1500=X (1+i) + X ( 1+ i )

1500 1500
⟹ X= −n1 −n
= =$ 818.16
( 1+i ) + ( 1+i ) (1+ 0.06 ) + ( 1+0.06 )−2
2 −1

49. A document worth $180,000 must be settled within 3 and a half years. Determine the
equivalent values if the debt is settled:

a) in a year

P=? F 1=? F=180000 i=0.22 anual n1=1 n=3.5 m=4

F 180000
P= = =85062.49
( ) ( )
nm 3.5∗4
i 0.22
1+ 1+
m 4

( ) ( )
n1 m 1∗4
i 0.22
F 1=P 1+ =85062.49 1+ =$ 105377.5
m 4
b) in 4 years

P=85062.49 F 2=? i=0.22 anual n2 =4 años

( ) ( )
n2 m 4∗4
i 0.22
F 1=P 1+ =85062.49 1+ =$ 200344.5
m 4
Consider an interest rate of 22% compounded quarterly.

50. A piece of country land is purchased. $50,000 down payment is paid and two documents
are signed for the same amount to be paid in 1 and 2 years. What sum must be delivered to
pay off the purchase after one year if the interest rate is:
Alexander Merejildo Tomalá

a) 15%? 50000 50000

0 1 2
x

−n1 −n2 −n3

50000 ( 1+i ) + 50000 (1+i ) =X ( 1+i )

⟹ X=50000 [ (1+i ) ] ( 1+i )n

−n1 −n2
+ ( 1+i ) 3

X =50000 [ ( 1+ 0.15 ) + ( 1+0.15 ) ] ( 1+0.15 )1=$ 93478 .26

−1 −2

b) 30%?

X =50000 [ ( 1+ 0.3 ) + ( 1+0.3 ) ] ( 1+0.3 )1=$ 88461.54

−1 −2

c) 40%?

X =50000 [ ( 1+ 0.4 )−1+ (1+ 0.4 )−2 ] ( 1+0.4 )1=$ 85714.29

d) 50%?

X =50000 [ ( 1+ 0.5 )−1 + ( 1+0.5 )−2 ] ( 1+0.5 )1=$ 83333.33

e) 60%?

X =50000 [ ( 1+ 0.6 )−1 + ( 1+0.6 )−2 ] ( 1+ 0.6 )1=$ 81250

51. A person incurs a debt that must be settled by paying $30,000 in 6 months and another
payment of $50,000 in a year and a half. How much should you pay to settle the debt in a
single payment?

m=12 F 1=30000 F 2=50000 i=0.2 anual n1=0.5 n2 =1.5

P1=? P2=? F=?

a) at the moment?

F1 30000
P 1= = =27167.5
(1+ mi ) ( )
n1 m 0.5∗12
0.2
1+
12

F2 50000
P 2= = =37 132.61
(1+ mi ) ( )
n2 m 1.5∗12
0.2
1+
12

P=P1 + P2=$ 64300.11

b) in a year?

( ) ( )
nm 1∗12
i 0.2
F=P 1+ =64300.11 1+ =$ 78406.98
m 12
Alexander Merejildo Tomalá

c) in a year and a half?

( ) ( )
nm 1.5∗12
i 0.2
F=P 1+ =64300.11 1+ =$ 86581.73
m 12

The current interest rate is 20% convertible monthly.

52. A company sells machinery for $35,000. They pay you $15,000 in cash and sign two
documents for $10,000 each, maturing in 6 and 12 months. What amount will pay off the debt
after 6 months if interest of 30% convertible monthly is applied?

$10000 $10000

0 0.5 1 year
x

( ) ( ) ( )
−n1 m −n2 m −n3 m
i i i
10000 1+ +10000 1+ =X 1+
m m m

[( ) ( ) ] ( )
−n1 m −n2 m n3 m
i i i
⟹ X=10000 1+ + 1+ 1+
m m m

[( ) ( ) ] ( )
−0.5∗12 −1∗12 0.5∗12
0.3 0.3 0.3
X =10000 1+ + 1+ 1+ =$ 18622.97
12 12 12

53. Mary owes $15,000 due in one year. Pay $2,000 after 3 months and $3,000 every month.
What amount must be delivered after 9 months to settle the debt if an interest of 1.5% per
month is considered?
P1=? F 1=? i=0.015 mensual n1=3 meses
F 2=? n2 =3 meses F=15000

F 15000
P 1= = =12545.81
( 1+i ) (1+ 0.015)12
n

n1 3
F 1=P1 (i+ 1) =12545.81(0.015+1) =13118.88
n2 3
F 2=P2 (1+i) =(13118.88−2000) ( 0.015+1 ) =11626.78
n3 3
F 3=P3 (i+1) =(14310.29−3000) ( 0.015+1 ) =$ 9020.83

54. Andrew applies for a loan of $158,000 to purchase a house. Offer to pay 20,000 in one
year, 30,000 in 2 years and the balance in 3 years. What amount must you pay to settle the
debt if the interest rate is:

158000
a) J4 = 8%?

0 1 2 3
20000 30000 x
Alexander Merejildo Tomalá

( ) ( ) ( )
−n1 m −n2 m −n3
i i i
158000=20000 1+ +30000 1+ +1 X 1+
m m m

[ ( ) ( ) ]( )
−n1 m −n2 m n3 m
i i i
⟹ X= 158000−20000 1+ −30000 1+ 1+
m m m

[ ( ) ( ) ]( )
−1∗4 −2∗4 3∗4
0.08 0.08 0.08
X = 158000−20000 1+ −30000 1+ 1+
4 4 4

X =$ 144476.05

b) J4 = 12%?

[ ( ) ( ) ]( )
−1∗4 −2∗4 3∗4
0.12 0.12 0.12
X = 158000−20000 1+ −30000 1+ 1+
4 4 4

X =$ 166169.55
c) J4 = 15%?

[ ( ) ( ) ]( )
−1∗4 −2∗4 3∗4
0.08 0.08 0.08
X = 158000−20000 1+ −30000 1+ 1+
4 4 4

X =$ 184152.86

Complementary Exercises
1. $20,000 is invested in a bank account. Determine the amount compounded after 5 years, if
the average monthly convertible interest rate is:

P=20000 F=? i=? m=12 n=5 años

a) 15%

( ) ( )
nm 5∗12
i 0.15
F=P 1+ =20000 1+ =$ 42143.63
m 12
c) 25%

( )
5∗12
0.25
F=20000 1+ =$ 68916.08
12
d) 38%

( )
5∗12
0.38
F=20000 1+ =$ 129835.64
12

e) 54%
Alexander Merejildo Tomalá

( )
5∗12
0.54
F=20000 1+ =$ 280548.16
12

2. What is the amount of a $100,000 investment after one year, if it is deposited in a bank
account that pays 30% convertible interest:
P=100000 F=? i=0.3 anual m=? n=1 años

a) annually?

( )
1∗1
0.3
F=100000 1+ =$ 130000
1

b) semi-annually?

( )
1∗2
0.3
F=100000 1+ =$ 132250
2
d) quarterly basis?

( )
1∗4
0.3
F=100000 1+ =$ 133546
4
e) monthly?

( )
1∗12
0.3
F=100000 1+ =$ 134488.88
12

3. The prices of the basic food basket have increased at an annual rate of 25% for 3 years. If
the current price is $765, what was its value 3 years ago?

P=? F=765 i=0.25 anual n=3 años

−n −3
P=F ( 1+ i ) =765(1+ 0.25) =$ 392.68

4. You want to create a fund of $250,000 after 2 years. What amount should be deposited
today if the bank pays interest of:

P=? F=250000 m=? i=? n=2 años

a) 10% convertible monthly?

( ) ( )
−nm −2∗12
i 0.10
P=F 1+ =250000 1+ =$ 204852.38
m 12
b) 20% convertible semi-annually?

( )
−2∗2
0.20
P=250000 1+ =$ 170753.36
2
d) 23% annually?
Alexander Merejildo Tomalá

−n −2
P=F ( 1+ i ) =250000(1+ 0.23) =$ 165245.55

5. Minimum wages have increased at an average annual rate of 13% over the last 4 years. If
this trend continues, in what time will its nominal value triple?
P= X F=3 X i=0.13 n=?

n=
log ( FP ) = log ( 3XX ) = log ( 3 )
=8.99 años
log (1+i ) log ( 1+0.13 ) log ( 1+ 0.13 )

6. The price of houses and land has doubled in 3 years. What is the annual interest rate you
have earned?

i=
√
n F
P
−1=
3 3X

X √
−1=0.442=44.22 % anual

7. A country has five refineries to supply fuel. Their current production is 1,000,000 barrels per
day and they work at 80% of their capacity. If the average growth in consumption has been 4%
annually, in what time will said country need to put a new refinery into operation?
1000000
P=1000000 F= i=0.04 n=?
0.8

n=
log ( FP ) = log ( 1250000
1000000 )
=
log ( 1.25 )
=5.69 años
log (1+i ) log ( 1+0.04 ) log ( 1+0.04 )

8. What is the nominal monthly convertible rate equivalent to:

a) a rate of 11% annually?

( )
mn
( 1+i )n= 1+ j
m

⇒ j=m ( m√ 1+i−1 )

j=12 ( 12√ 1+ 0.11−1 )=0.1048=10.48 %

b) a rate of 18% annually convertible semiannually?

( ) ( )
m1 m2
i j
1+ = 1+
m1 m2

( √( ) ) ( √( ) )
m1 2
m2 i 12 0.18
j=m2 1+ −1 =12 1+ −1 =0.1736=17.36 %
m1 2

c) a rate of 32% annually convertible quarterly?

Alexander Merejildo Tomalá

j=12 ( √(
12
1+
4 )
0.32 4
)
−1 =0.3118=31.18 %

9. A debt of $400,000 must be paid off in two equal payments in 60 and 120 days. What is the
amount of these payments if the annual interest rate is 26% with bimonthly compounding?

400000 x x

0 1/6 1/3 years

−n1 −n2
400000=X ( 1+i ) + X ( 1+i )
400000
⇒ X=
( ) ( )
−n1 m −n2 m
i i
1+ + 1+
m m

400000
X= =$ 213091.9
( ) ( )
−1 −1
0.26 ∗6 0.26 ∗6
1+ 6
+ 1+ 3
6 6

10. In what time can a debt of $27,500 payable in one year, and $38,450 payable in two years,
be settled with a single payment, if the interest rate is:

a)

0 $27500 $38450

1 x 2
27500+38450

10% annually?

−n1 −n2 −X
27500 ( 1+i ) +38450 ( 1+ i ) =65950 ( 1+i )

X=
log
[ 65950
−n1
27500 ( 1+i ) +38450 ( 1+i )
−n 2
]
log ( 1+ i )

X=
log
[ 65950
−1
27500 ( 1+0.1 ) +38450 ( 1+i )
−1
] =1.57 años
log ( 1+ 0.1 )
b) 20% annually?

X=
log
[ 65950
−1
27500 ( 1+0.2 ) +38450 ( 1+0.2 )
−1
] =1.56 años
log ( 1+0.2 )
Alexander Merejildo Tomalá

c) 30% annually?

X=
log
[ 65950
−1
27500 ( 1+0.3 ) + 38450 (1+ 0.3 )
−1
]
=1.55 años
log ( 1+ 0.3 )
e) 50% annually?

X=
log
[ 65950
−1
27500 ( 1+0.5 ) + 38450 (1+ 0.5 )
−1
]
=1.53 años
log ( 1+ 0.5 )
11. Determine the compounding period and conversion frequency of:

a) an investment in certificates from the Federal Treasury with maturities every 91 days.
The compounding period is quarterly and its conversion frequency is 4

b) an investment in a savings account that pays interest at 20% annually semiannually.

The capitalization period is semiannual and its conversion frequency is 2

c) an investment in promissory notes payable every 28 days.

The compounding period is monthly and its conversion frequency is 12

12. What is the interest rate per capitalization period for the following investments:

a) 6% compounded monthly?
6
i= =0.5 %
12
b) 18% compounded quarterly?
18
i= =4.5 %
4
c) 22% compounded annually?

i=22 %
d) 22% compounded semiannually?
22
i= =11%
2
13. A bank offers the following investment alternatives:

a) One-year fixed-term deposits 12.0%

n 1
F=P ( 1+ i ) =50000 ( 1+ 0.12 ) =$ 56000
b) Fixed-term deposits compounded monthly 11.5%

( ) ( )
nm 1∗12
i 0.115
F=P 1+ =50000 1+ =$ 56062.97
m 12
c) Fixed-term deposits with interest compounded quarterly 11.6%
Alexander Merejildo Tomalá

( ) ( )
nm 1∗4
i 0.116
F=P 1+ =50000 1+ =$ 56057.21
m 4
d) Fixed-term deposits with interest compounded semiannually 11.8%

( ) ( )
nm 1∗2
i 0.118
F=P 1+ =50000 1+ =$ 56074 .05
m 2

If you want to invest $50,000, what is the best alternative?

∴ Lamejor alternativa seria la d

14. What will be the amount of the $50,000 from the previous year, if it is deposited for 10
years in:

a) a securities account at 22% compounded monthly?

( )
10∗12
0.22
F=50000 1+ =$ 442349.14
12
b) a securities account at 27.5% compounded monthly?

( )
10∗12
0.27 .5
F=50000 1+ =$ 758229.32
12
c) a 30% securities account compounded monthly?

( )
10∗12
0.3
F=50000 1+ =$ 967907.49
12
d) a 35% securities account compounded monthly?

( )
10∗12
0.35
F=50000 1+ =$ 1574908.73
12
e) a 40% securities account compounded monthly?

( )
10∗12
0.4
F=50000 1+ =$ 2557541.55
12
15.

a) What will be the amount of a savings account in which $50,000 is deposited for 10 years, if
the interest rate is 8%, compounded semiannually?

( )
10∗2
0.08
F=50000 1+ =$ 109556.16
2
b) What will the amount be in 15 years?

( )
15∗2
0.08
F=50000 1+ =$ 162169.86
2
Alexander Merejildo Tomalá

c) In 20 years?

( )
15∗2
0.08
F=50000 1+ =$ 240051.03
2
16. A person wants to create a savings fund for his old age. Deposit $10,000 into an account
that pays 12% annually convertible monthly. What will be the amount you have at your
disposal after 25 years?

( )
25∗12
0.12
F=10000 1+ =$ 197884.66
12
17. Retail sales have increased at a rate of 3% annually. If 100,000 units were sold during the
year, what are the estimated sales for 5 years from now if the growth rate is maintained?
5
F=100000 ( 1+0.03 ) =115927.4 unidades
18. In a city, the growth in the number of automobiles has been 6% annually on average during
the last 5 years. If the trend continues, what will be the number of cars that will be on the road
in 10 years, if there are currently two million vehicles?
10
F=2000000 ( 1+0.06 ) =3581695 .39 vehículos
19. A person deposits $5,000 in a savings account that pays 10% annual interest convertible
semiannually. What will be the amount collected after 28 months? Calculate by the exact
method and by the approximate method.

( )
2.333∗2
0.10
F=5000 1+ =$ 6278.46
2
20. Determine the effective annual interest rate equivalent to:

a) 20% compounded semiannually

( )
m
j
1+i= 1+
m

( )
m
j
⇒ i= 1+ −1
m

( )
2
0.2
i= 1+ −1=0.21=21 %
2
b) 20% compounded monthly

( ) −1=0.2194=21.94 %
12
0.2
i= 1+
12
c) 30% compounded monthly
Alexander Merejildo Tomalá

( ) −1=0.3449=34.49 %
12
0.3
i= 1+
12
d) 40% compounded monthly

( ) −1=0.4821=48.21%
12
0.4
i= 1+
12
e) 50% compounded quarterly

( )
4
0.5
i= 1+ −1=0.6018=60.18 %
4
f) 50% compounded monthly

( ) −1=0.6321=63.21 %
12
0.5
i= 1+
12
f) 60% compounded quarterly

( )
4
0.6
i= 1+ −1=0.7490=74.9 %
4
g) 60% compounded monthly

( ) −1=0.7959=79.59 %
12
0.6
i= 1+
12
h) 60% compounded weekly

( ) −1=0.8159=81.59 %
52
0.6
i= 1+
52
21. Determine the nominal interest rate J m equivalent to an effective rate of:

j=m ( m√ 1+i−1 )
a) i = 15% m =1

j=1 ( √1 1+0.15−1 ) =15 %

b) i = 15% m = 2

j=2 ( √2 1+ 0.15−1 ) =14.48 %

c) i = 15% m = 4

j=4 ( √4 1+ 0.15−1 ) =14.22 %

d) i = 15% m = 12

j=12 ( 12√ 1+ 0.15−1 ) =14.06 %

Alexander Merejildo Tomalá

e) i = 26% m = 12

j=12 ( 12√ 1+ 0.26−1 )=23.34 %

f) i = 12% m = 4

j=4 ( √4 1+ 0.12−1 )=11.49 %

g) i = 35% m = 12

j=12 ( 12√ 1+ 0.35−1 ) =30.39 %

h) i = 9% m = 4

j=4 ( √4 1+ 0.09−1 ) =8.71 %

22. Determine:

( √( ) )
m1
m2 jm
j m =m2 1+ 1
−1
2
m1

a) the nominal interest rate J4 equivalent to J12 = 14%

( √( ) −1)=14.16 %
12
4 0.14
j 4=4 1+
12

b) the nominal interest rate J4 equivalent to J12 = 18%

( √( ) −1)=18.27 %
12
4 0.18
j 4=4 1+
12

c) the nominal interest rate J4 equivalent to J2 = 10%

( √( ) )
2
4 0.1
j 4=4 1+ −1 =9.88 %
2

d) the nominal interest rate J6 equivalent to J4 = 8%

( √( ) )
4
6 0.08
j 6 =6 1+ −1 =7.97 %
4

e) the nominal interest rate J12 equivalent to J4 = 12%

j 12=12 ( √(12
1+
0.12 4
4 ) )
−1 =11.88%

f) the nominal interest rate J12 equivalent to J4 = 15%

Alexander Merejildo Tomalá

j 12=12 ( √(
12
1+
0.15 4
4 )
−1 =14.82 % )
g) the nominal interest rate J12 equivalent to J12 = 20%
j 12=20 %
h) the nominal interest rate J12 equivalent to J4 = 24%

( √( ) )
4
12 0.24
j 12=12 1+ −1 =23.54 %
4

23. Determine the effective interest rate equivalent to a nominal rate of 18% compounded:

( )
m
j
i= 1+ −1
m
a) annually

( )
1
0.18
i= 1+ −1=18 %
1
b) semi-annually

( )
2
0.18
i= 1+ −1=18.81%
2
c) quarterly

( )
3
0.18
i= 1+ −1=19.1%
3
d) quarterly

( )
4
0.18
i= 1+ −1=19.25 %
4
e) bimonthly

( )
6
0.18
i= 1+ −1=19.4 %
6
f) annually
i=18 %
f) monthly

( ) −1=19.56 %
12
0.18
i= 1+
12
g) weekly

( ) −1=19.68 %
52
0.18
i= 1+
52
Alexander Merejildo Tomalá

What is the difference between the effective rate with annual compounding and the weekly
effective rate?

Hay una diferencia de 1.68 %

24. A car sales firm offers two payment plans: cash $135,000; in installments: $40,000 down
payment and two payments of $52,500 at 3 and 6 months. Which alternative is more
convenient if the interest rate is:

a) J4 = 10%? i=2.5 % trimestral

−1 −2
40000+ 52500 (1+ 0.025 ) +52000 ( 1+ 0.025 ) =$ 140226.06

b) J4 = 20%? i=5 % trimestral

−1 −2
40000+ 52500 (1+ 0.05 ) +52000 (1+ 0.05 ) =$ 136689.34

c) J4 = 30%? i=7.5 % trimestral

−1 −2
40000+ 52500 (1+ 0.075 ) +52000 ( 1+ 0.075 ) =$ 133369.39
d) J4 = 40%?

−1 −2
40000+ 52500 (1+ 0.05 ) +52000 ( 1+ 0.05 ) =$ 130247.93

e) Indicate the current value of installment payments.

∴≤convendria pagar a plazos con latasa de 40 % convertib≤trimestralmente

25. Alejandra obtained a loan of $4,300 and agrees to pay it off in three payments at 1, 2, and
3 months, with an interest of 2% per month. The second payment will be double the first and
the third, double the second. What is the amount of the payments?
−1 −2 −3
4300=X ( 1+0.02 ) +2 X ( 1+0.02 ) + 4 X ( 1+0.02 )
4300
⇒ X= =$ 644.48
( 1+ 0.02 ) +2 (1+ 0.02 )−2 +4 (1+ 0.02 )−3
−1

∴ El primer paga será de $ 644.48 , el segundo de $ 1288.96 y el tercero de $ 2577.93

26. Determine the effective interest rates equivalent to nominal J rates of 16% and 20%
compounded:

( )
m
j
i= 1+ −1
m
a) annually
i 1=16 % ,i 2=20 %
b) semi-annually

( ) ( )
2 2
0.16 0.2
i❑1= 1+ −1=16.64 % i❑2= 1+ −1=21 %
2 2
Alexander Merejildo Tomalá

c) quarterly

( ) ( )
3 3
0.16 0.2
i❑1= 1+ −1=16.87 % i❑2= 1+ −1=21.36 %
3 3

d) quarterly

( ) ( )
4 4
0.16 0.2
i❑1= 1+ −1=16.99 % i❑2= 1+ −1=21.55 %
4 4

e) bimonthly

( ) ( )
6 6
0.16 0.2
i❑1= 1+ −1=17.11 % i❑2= 1+ −1=2 1.74 %
6 6

f) annually
i 1=16 % ,i 2=20 %
h) monthly

( ) ( ) −1=21.94 %
12 12
0.16 0.2
i❑1= 1+ −1=17.23 % i❑1= 1+
12 12

i) weekly

( ) ( ) −1=22.09 %
52 52
0.16 0.2
i❑1= 1+ −1=17.32 % i❑1= 1+
52 52

What is the difference between effective rates compounded annually and those compounded
monthly?

27. At what monthly convertible nominal interest rate should capital be invested so that it is
doubled in:

i=
√
n F
P
−1

a) 5 years?

i=√ 2−1=14.87 %
5

b) 4 years?

i=√ 2−1=18.92 %
4

c) 3 years

i=√ 2−1=25.99 %
3
Alexander Merejildo Tomalá

d) 2 years?

i=√ 2−1=41.42 %
2

e) 1 year?

i=√ 2−1=100 %
1

28. Which investment alternative is most profitable:

a) a 6-month deposit with an interest rate of 7.5% convertible semi-annually, or one with a
rate of 7.25% convertible monthly?

( )
0.5∗2
0.075
F 1=X 1+ =1.025 X
2

( )
0.5∗12
0.0725
F 2=X 1+ =1.37 X
12
∴ Es conveniente escoger latasa de 7.25 % convertible mensualmente

b) a 12-month deposit with an interest rate of 10% convertible annually, or one with a rate of
9.5% convertible monthly?

( )
1∗1
0.1
F 1=X 1+ =1.1 X
1

( )
1∗12
0.095
F 2=X 1+ =1.099 X
12
∴ Es conveniente escoger latasa de 10 % convertible anualmente

29. What is the simple interest rate equivalent to a 14% convertible rate:

( )
nm
j
1+¿= 1+
m

( )
3m
j
1+i= 1+
m

( )
3m
j
1+ −1
m
i=
3

a) monthly

( )
3∗12
0.14
1+ −1
12
i= =17.28 %
3
b) quarterly
Alexander Merejildo Tomalá

( )
3∗4
0.14
1+ −1
4
i= =17.04 %
3
c) semi-annually

( )
3∗2
0.14
1+ −1
2
i= =16.69 %
3
d) annually

( )
3∗1
0.14
1+ −1
12
i= =16.05 %
3
If you invest capital for 3 years?

30. Find the present value of $10,000 that will be received within:
−n
P=F ( 1+ i )
a) 1 year
−1
P=10000 ( 1+0.3 ) =$ 7692.31
b) 2 years
−2
P=10000 ( 1+0.3 ) =$ 5917.16
c) 3 years
−3
P=10000 ( 1+0.3 ) =$ 4551.66
d) 5 years
−5
P=10000 ( 1+0.3 ) =$ 2693.29
e) 10 years, if the interest rate is 30% annually.
−1 0
P=10000 ( 1+0.3 ) =$ 725.38
31. Find the present value of $10,000 that will be received in five years, if the annual interest
rate is:
−n
P=F ( 1+ i )
a) 10%
−5
P=10000 ( 1+0.1 ) =$ 6209.21
b) 20%
−5
P=10000 ( 1+0.2 ) =$ 4018.77
c) 30%
Alexander Merejildo Tomalá

−5
P=10000 ( 1+0.3 ) =$ 2693.29
d) 40%
−5
P=10000 ( 1+0.4 ) =$ 1859.34
e) 50%
−5
P=10000 ( 1+0.5 ) =$ 1316.87
f) 75%
−5
P=10000 ( 1+0.1 ) =$ 609.26
g) 100%
−5
P=10000 ( 1+1 ) =$ 312.5
32. Find the present value of $10,000 that will be received in three years if the interest rate is
15% compounded:

( )
−nm
i
P=F 1+
m
a) annually

( )
−3∗1
0.15
P=10000 1+ =$ 6575.16
1
b) semi-annually

( )
−3∗2
0.15
P=10000 1+ =$ 6479.6 2
2
c) quarterly

( )
−3∗3
0.15
P=10000 1+ =$ 6 446.09
3
d) quarterly

( )
−3∗4
0.15
P=10000 1+ =$ 6428.99
4
e) bimonthly

( )
−3∗6
0.15
P=10000 1+ =$ 6411.66
6
f) monthly

( )
−3∗1 2
0.15
P=10000 1+ =$ 6394.09
12
Alexander Merejildo Tomalá

g) daily

( )
−3∗365
0.15
P=10000 1+ =$ 6376.87
365

if you invest capital for 3 years.

33. Determine the current value of:

( )
−nm
i
P=F 1+
m

a) $10,000 payable in 6 months at 18% convertible monthly;

( )
−0.5∗12
0.18
P=10000 1+ =$ 9145.42
12
b) $50,000 payable in 3 years at 20% convertible quarterly;

( )
−3∗4
0.2
P=50000 1+ =$ 27841.87
4
c) $120,000 payable in 18 months at 22% convertible quarterly;

( )
−1.5∗4
0.22
P=120000 1+ =$ 87029.5
4
d) $400,000 payable in 2 years at 40% convertible quarterly.

( )
−2∗4
0.4
P=400000 1+ =$ 186602.95
4

34. How much money must a person deposit in a bank to raise $100,000 within 2 years, if the
current interest rate is:

( )
−nm
i
P=F 1+
m
a) 6% convertible monthly?

( )
−2∗12
0.06
P=100000 1+ =$ 88718.57
12
b) 10% convertible quarterly?

( )
−2∗4
0.1
P=100000 1+ =$ 82074.66
4
c) 12% convertible semi-annually?
Alexander Merejildo Tomalá

( )
−2∗2
0.12
P=100000 1+ =$ 79209.37
2
d) 14% convertible annually?

( )
−2∗1
0.14
P=100000 1+ =$ 76946.75
1
e) Which alternative is the most convenient?

∴ La opcionmas conveniente es depositar $ 76946.75 con una tasa del14 % anual

35. What amount must be paid today for a 36-month debt, if the interest rate is 17% annually
compounded quarterly and the amount is $44,850?

( ) ( )
−nm −3∗4
i 0.17
P=F 1+ =44850 1+ =$ 27217.59
m 4
36. A note of $180,000 with a 24-month term is discounted at the bank at a rate of 22%
convertible quarterly. What is the amount received?

( )
−2∗4
0.22
P=180000 1+ =$ 117287.8
4
37. A bank discounts a $48,000 note with a maturity of 20 months by applying an interest rate
of 14% convertible monthly. In turn, the bank rediscounts the document at a financial
institution that charges 12% convertible interest quarterly. What is its usefulness in the
operation? Apply the exact method for the fractional period of interest.

( )
−1.6666∗12
0.14
P1=4800 0 1+ =$ 38062.07
12

( )
−1.6666∗4
0.12
P2=48000 1+ =$ 39414.84
4

U =P ❑2−P1=39414.84−38062.07=$ 1352.77
38. Determine the present value of a debt of $200,000 to be paid in 3 years and 4 months, if
the current interest rate is 19% convertible quarterly. Use both methods to determine the
result.

( ) ( )
−nm −3.333∗4
i 0.19
P=F 1+ =200000 1+ =$ 107723. .29
m 4

39. You want to discount a promissory note worth $175,000 in 105 days. The bank charges a
16.5% convertible rate monthly. Determine capital using both methods

( ) ( )
−nm −0.2917∗12
i 0.165
P=F 1+ =175000 1+ =$ 166832.25
m 12