Chapter 6

Problems 1,3,6,10,14,15,17,36,42,45,46,50,66,70,71
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
Chapter 6
Question 1
Input area:
Output area:
Discount rate
Year Cash flow
1
2
3
4
- $
Chapter 6
Question 3
Input area:
Output area:
Discount rate
Year Cash flow
1
2
3
4
- $
Chapter 6
Question 6
Input area:
Interest rate on annuity
# of years
Annual revenues
Output area:
Present value - $
Chapter 6
Question 10
Input area:
Interest rate
Desired amount
Output area:
Present value = #DIV/0!
Chapter 6
Question 14
Input area:
Output area:
Stated rate (APR) # of times per year Effective rate
First National Bank #NUM!
First United Bank #NUM!
Chapter 6
Question 15
Input area:
Output area:
Stated rate (APR) # of times per year Effective rate
#NUM!
The borrower is actually paying annualized interest of
0.00% per year, not the #NUM!
reported on the loan contract.
Chapter 6
Question 17
Input area:
Interest rate
# of years
Deposit
# of times compounded per year
Output area:
Future value = #DIV/0!
Chapter 6
Question 36
Input area:
Amount per year in option 1
Amount per year in option 2
Signing bonus in option 2
Interest rate
# of times compounded per year
Output area:
EAR #NUM!
Present value of option 1 #NUM!
Present value of option 2 #NUM!
Chapter 6
Question 42
Input area:
Monthly payment
Price of house
Number of months
APR
Output area:
Present value of payments - $
Balloon payment - $
Chapter 6
Question 45
Input area:
Monthly payment
Price of warehouse
Percentage of pruchase price
Number of years
Output area:
Amount of loan - $
Interest rate per month #NUM!
APR #NUM!
EAR #NUM!
Chapter 6
Question 46
Input area:
Selling price
Production cost
# of years until sale
Discount rate
Output area:
Present value of sale - $
Profit (loss) - $
Breakeven rate #NUM!
Chapter 6
Question 50
Input area:
Amount of payment
# of years until payments begin
# of years value is to be calculated
Interest rate
Output area:
Present value of perpetual stream = #DIV/0!
Present value at requested year = #DIV/0!
Chapter 6
Question 66
Input area:
Annual withdrawal
# of years to withdraw
# of years until retirement
Interest rate
Employer contribution
Trust fund distribution
Years until distribution
Output area:
a. Present value of withdrawals = - $
Annual deposit until retirement = #NUM!
b. Present value in lump sum = - $
c. Future value of trust fund deposit = - $
Total annual deposit necessary = #NUM!
Friend's annual deposit = #NUM!
Chapter 6
Question 70
Input area:
Annual payment
# of years
Annual payout
# of years
Output area:
Year Cash flow
1 - $
2 - $
3 - $
4 - $
5 - $
6 - $
7 - $
8 - $
9 - $
10 - $
Breakeven rate = #NUM!
Chapter 6
Question 71
Input area:
Plan X:
Annual payment
# of years
Plan Y:
Annual payout
# of years
Output area:
Discount rate needed = #DIV/0!