Chap 4 Knowledge Check Answer Key

Knowledge Check 4.1

Time Interest Balance
0 $8,000.00
3 months $320.00 $8,320.00
6 months $332.80 $8,652.80
9 months  $346.11 $8,998.91

 

Knowledge Check 4.2

  1. $8,000(1.04)3 = $8,998.91
  2. $1,000(1.10)2 = $1,1210
  3. $2,500(1.0066666667)48 = $3,439.17

 

Knowledge Check 4.3

1. [latex]\frac{$ 5,849.29 }{1.04^4} =$ 5,000[/latex]

2. [latex]\frac{$ 8,998.91 }{1.04^3} =$ 8,000[/latex]

3. [latex]\frac{$ 50,000 }{1.085^6} =$$30,647.25[/latex]

 

Knowledge Check 4.4

a. With i = 0.07, n = 3 × 2, FV = $9,209.76

b. n=(l0+12)× 2, FV=$10,309.11,
when PV = $6,000, n = 4 × 2, FV = $10,309.12

The difference is due to rounding off the FV in (a).

 

Knowledge Check 4.5

1. $14,638.67

B/E P/Y C/Y N I/Y PV PMT FV
END 12 16 15 12,000 0 CPT

 

2. $7,646,61

B/E P/Y C/Y N I/Y PV PMT FV
END 4 16 15 CPT 0 -9,500

 

3. 6% nominal

B/E P/Y C/Y N I/Y PV PMT FV
END 12 12 CPT 80,000 0 -84,934.22

 

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