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ADMS 3541 (21)
Lecture

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Department
Administrative Studies
Course
ADMS 3541
Professor
Chris Robinson
Semester
Winter

Description
Multiple choice chapter 2 2. calculate EAR for each - { 1 + 0.0685/2} ^ 2 – 1 = 6.6973 3. a. 9750 b. PMT = 2000, N = 5, I = 6, cpt PV = 8424.73 or PVA = 2000 ( 6% , 5) = 8424.73 c. PMT 1950 , N= 5, I = 6, CPT PV ( find annuity due) PMT = 1800, N = 6, I = 6, PV = 8851.18 d. PV 2000 5000 3000 1200 N 1 2 3 4 I 6 6 6 6 Pv = 9806.06 4. C 5. a. before tax real rate of interest Rreal (1-t) , can be negative b. {(1 + Rnom)(1-t)}/ ( 1+i) c. return on stock can be negative Chapter 2 : Problems 1. Calculate FV for all possible rates. PV 10,000, N = 60, I = (5/12)% , FV = 12833.84 PV 10,000 N = 20, I = 5.25/ 4 , FV = 12971.58 PV 10,000 N = 10 I = 5.35/2 , FV = 13021.08 Semi annual rate is the best for her 3. PVA 20,000 , 40, 4% = 1900510 , 395855.4777 5. PV 25000, I = 1% , N 60, PMT $556.11 7. 10% ( 7) = 7% 6% (7)= 4.2% 2
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