Time Value of Money Problem Set Answers
Problem Set 1:
1) 24,464.43
2) 25,093.31
3) 1,738.91
4) 4,755.19
5) 675,764.89
6) 14,381.74
Problem Set 2:
1) 10% compounded semi-annually (1.05^2 = 1.1025; 1.0238^4 = 1.0984)
2) 19,236.15
3) 98,111.31
4) 5,575.46
5) 22,601.66
6) 15.94%
7) 6,357.56
Problem Set 3:
1) ANN: 15 – 25,288.30 25-20,519.45 MO: 15-2,067.95 30-1614.72
2) 14,043.41
3) Yes, NPV = 10,850.30
4) 13.22%
5) PMT = 103,873.36
a. Balance end of year 5 equals 961,283.21
b. Balance end of year 15 equals 801,472.49
6) PV = 854,972.16
7) 79,612.63 + 220,436.31 = 300,048.94
8) PMT = 638.58 (724.26 – 638.58 = 85.68)
9) IRR = 16.2%; NPV = 1,306.20
10) 68,640.81
Problem Set 4:
1) a) 19,876.60 b) 1,903,479.15
2) 48,076.30 + 159,263.83 = 207,340.13
3) Investment 1 IRR = 9.57% Investment 2 IRR = 10.18% or 9.94% assuming annual compounding
4) N=60, I = 12%, Pmt = 657.56, FV= 88,000 then 657.56 (pmt) + 120.00 (taxes, insurance, maintenance) = $777.56 rent
5) $1,365.86
6) 8.5%
7) 12.14%
8) NPV = $209.94 IRR = 12.27%
9) a) 10.36% b) 4,378.29
10) 163,028.46
11) 1,294.88
12) 137,243.36
Text Book Presentation/Study Aids
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Presentation Notes Ex12-1 Ex12-2 Ex12-3
Chapter 13
Presentation Notes Ex13-1 Ex13-2 Ex13-3 Ex13-4 Ex13-5 Ex13-6 Ex13-7
Ex13-8 Ex13-9 Ex13-10 Ex13-11 Ex13-12 Ex13-14 Ex13-15 Ex13-16
Chapter 14
Chapter 15
Downloads:
Investment Problem Spreadsheet Example