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6-15
PVA = PMT(PVIFA)
PVIFA = PVA/PMT = 85,000/8273.59 = 10.2737
The pay back period is 30 years, refer to Table A-2, we can get interest rate is 9%.
6-16
PVA = 10,000(PVIFA)
Refer to Table A-2, we get the PVIFA = 3.3872.
So, PVA = 10,000 * 3.3872 = $33,872.
After first withdraw,
33,872 (1.07) – 10,000 = 26,243.0, left in the account.
After last withdraw, there will be no money in the account.
6-17
PVA = PMT (PVIFA)
PVIFA = PVA/PMT = 12,000/1,500 = 8
Refer to the table A-2, we get that need about 15 years to repay the loan.
6-18
FVA = PMT (FVIFA)
10,000 = 1,250 (FVIFA)
FVIFA = 10,000/1250 = 8
Refer to the table-4, we get the number of periods is about 6.
Because the amount of the money in the account at the end of the 5th period will be:
FVA5 = 1250 (FVIFA)| (n=5, i=12%) = 1250 * 6.3528 = $7941
(7941 + x)*1.12 = 10,000
x = 10,000/1.12 – 7941 =$ 987.57
So, the last deposit is $987.57.
6-19
When the interest rate is 7%,
The value of perpetuity = $100/0.07 = $1428.57
When the interest rate is 14%,
The value of perpetuity = $100/0.14 = $714.28
6-20
Case 29