The Mathematics of Money

Copyright © 2008, The McGraw-Hill Companies, Inc.

Appendix A Answers to Odd-Numbered Exercises 641

7. Amount varies because of different number of
   days per month. Not an annuity.


8. Annuity


9. Present value


10. Future value


11. Future value


12. Present value


13. Annuity due. The payments start right away.


14. Timing not specifi ed so assume ordinary.


15. Annuity due. Payment is made at the beginning
    of the month.


16. Timing not specifi ed, so assume ordinary.


17. Future value of an ordinary annuity.


18. Present value of an ordinary annuity.

Chapter 4 Section 4.2

1. Year Start Interest Deposit End

1 $0.00 $0.00 $1,359.55 $1,359.55

2 $1,359.55 $77.49 $1,359.55 $2,796.59

3 $2,796.59 $159.41 $1,359.55 $4,315.55

4 $4,315.55 $245.99 $1,359.55 $5,921.09

Year Payment

Years’

Interest FV

1 $1,359.55 3 $1,605.54

2 $1,359.55 2 $1,518.96

3 $1,359.55 1 $1,437.04

4 $1,359.55 0 $1,359.55

To tal $5,921.09

3. a)

(1  .065)^54 
 1

_______________

.065

b) (1  .065) ^54 29.98325786


 1  28.98325786

/.065 445.89627485

5. a) 54.12223267, b) $54,122.23


6. a) 25, b) 0.075, c) 67.97786150, d) $203,933.58


7. $364,402.25


8. $6,986,993.30


9. a)

(^)
1  __0.082 12 
72

1

0.082__
12
b) (1  .082/12)^72 1.632849452

1  0.632849452
/(.082/12) 92.61211497
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