Pedeefe

SOLUTIONS TO SELECTED PROBLEMS

Student: You should work the problem completely before referring to the solution.

CHAPTER 2

Solutions included for problems 1, 4, 7, 10, 13, 16, 19, 22, 25,28, 31, 34, 37, 40, 43, 46, 49, 52, 55, 58, 61, 64, 67, 70, 73, 76, 79, and 82

2.1 1. (F/P,8%25) = 6.8485; 2. (P/A,3%,8) = 7.0197; 3. (P/G,9%,20) = 61.7770;
4. (F/A,15%,18) = 75.8364;5. (A/P,30%,15) = 0.30598

2.4 P = 600,000(P/F,12%,4)
= 600,000(0.6355)
= $381,300

2.7 P = 75(P/F,18%,2)
= 75(0.7182)
= $53.865 million2.10 P = 162,000(P/F,12%,6)
= 162,000(0.5066)
= $82,069

2.13 P = 1.25(0.10)(P/F,8%,2) + 0.5(0.10)(P/F,8%,5)
= 0.125(0.8573) + 0.05(0.6806)= $141,193

2.16 A = 1.8(A/P,12%,6)
= 1.8(0.24323)
= $437,814

2.19 P = 75,000(P/A,15%,5)
= 75,000(3.3522)
= $251,415

2.22 P =2000(P/A,8%,35)
= 2000(11.6546)
= $23,309

2.25 (a) 1. Interpolate between n = 32 and n = 34:
1/2 = x/0.0014
x = 0.0007(P/F,18%,33) = 0.0050 – 0.0007
= 0.0043

2. Interpolate between n = 50 and n = 55:
4/5 = x/0.0654x = 0.05232

(A/G,12%,54) = 8.1597 + 0.05232
= 8.2120

(b) 1. (P/F,18%,33) = 1/(1+0.18)33= 0.0042

2. (A/G,12%,54) = {(1/0.12) – 54/[(1+0.12)54 –1}
= 8.2143

28. (a) G = $5 million (b) CF6 =$6030 million (c) n = 12

2.31 (a) CF3 = 280,000 – 2(50,000)
= $180,000

(b) A = 280,000 – 50,000(A/G,12%,5)
= 280,000 – 50,000(1.7746)...