Copyright © 2008, The McGraw-Hill Companies, Inc.
Exercises 5 to 8 all are based on the following scenario. Each problem in this group builds upon the previous problems (i.e.,
Exercise 6 is based on Exercise 5 and so on.)
Odenbach Industrial Refrigeration Corp. produces and sells a line of commercial refrigeration units. Their product line consists
of four models: The A-780, the B-1000, the C-2750, and the D-365.- Suppose that the prices for these units are as follows: each A-780 costs $14,500, each B-1000 costs $17,900, each
C-2750 costs $25,800, and each D-365 costs $46,000.
a. Construct a spreadsheet similar to the one from Example 5.1.1 to calculate the total dollar amount of sales for
each product, and for the product line as a whole.
b. Use your spreadsheet to fi nd the total dollar amount of sales for October, when the company sold 128 A-780s,
75 B-1000s, 12 C-2750s, and 34 D-365s.- Use the spreadsheet you created in Exercise 5 to fi nd the total dollar sales generated by sales representative Will
Lohman, who sold six A-780s, four B-1000s, no C-2750s, and two D-365s. - Suppose that the company pays its sales representatives a 2½% commission on the A-780 and B-1000, and a 1¾%
commission on the C-2750 and D-365 models. Modify your spreadsheet so that it will calculate Will’s commission
earnings for the month of October. - In November, Will sold seven A-780s, nine B-1000s, four C-2750s, and none of the D-365s. The company raised
its price on the A-780s to $15,525 and lowered the price on the C-2750 to $24,075. Also, it increased the sales
commission on the B-1000s to 2¾%. Use a spreadsheet to calculate Will’s commission for that month.
B. Illustrating Compound Interest with Spreadsheets- Set up a spreadsheet similar to the one from Example 5.1.3 to calculate the future value of $3,407.19 invested at
5.25% compounded annually for 37 years. - Set up a spreadsheet to calculate the future value of $14,278.19 invested at a 9½% effective rate, and use it to
determine the value of this account after (a) 10 years, (b) 20 years, (c) 30 years, and (d) 40 years. Also use the
spreadsheet to determine the amount of interest earned in the (e) seventh year, (f) twenty-third year, and (g) fortieth
year. - Suppose that I invested $2,375.17 at 7.35% compounded monthly for 20 years. Set up a spreadsheet to illustrate how
my account will grow with this compound interest each month. How much will I have at the end of the 20 years? How
much interest will I earn in the fi rst month? How much interest will I earn in the last month?
Exercises 5.1 219