Transcription of ANSWERS TO SELECTED EXERCISES
1 ANSWERSTO SELECTEDEXERCISESS ection11.(a)(i) (ii) (b)(i) (ii) (a) (b) A MORTGAGE25-yearApril/79 April/81 July/81mortgage11% $30,000$86,601$126,951$145,329$40,000$11 5,468$169,268$193,772$50,000$144,335$211 ,585$242,214$60,000$173,203$253,902$290, 657A725. (a)PaymentPaymentInterestPrincipalBalanc eNumber$70001$621$68$5536447262163558588 9362157564532546215256947565621465754181 6621415803601762135586301586212959224239 6212459718261062118603122311621126096141 262066145. (b)PaymentPaymentInterestPrincipalBalanc eNumber$70001$621$70$5516449262165556589 3362159562533146215356847635621485734190 6621425793611762136585302686213059124359 6212459718381062118603123511621136086271 2621661512A736. (a)PaymentPaymentInterestBalanceBalanceN umberReduction$36017$621$36$621298086213 0621235996212462117381062117621111711621 11621496126215621(125)Interestaddedon:12 3(123)(2)(b)PROPERMETHODP aymentPaymentInterestPrincipalBalanceNum ber$10,0001$ $ $ , , , , , , , , , , :$ $10, $ $ $ , , , ( )7, , , , ( )5, , , , ( )2, , ( ) ( )( )Totalinterest:$ (c)R=A (r+ 2)2 1 +r2 1=6 1 r(r+ 4);i'2r(4 +r)96 + 44r+ 5r2 Section22.
2 (a)(i)$ (ii)$ (iii)$ (iv)$ (v)$ (b)(i)108;$662leftover(ii)101;$767leftov er(iii)92;$106leftover(iv)98;$265leftove r(v)110;$780leftoverA754. (a)$ (b)$ (c)$ (a)P1=941:96P2=943:77P3=945:68P4=947:69( b)P1:5=967:52P1:75=980:55P1:9=988:46P2:5 =968:38P3:5=971:34(c) (d)y=Pt+x Pt+1+V r Pt P1:5'967:86P1:7'980:82P1:9'988:59P2:5'96 9:72P3:5'971:68(e)kV rrepresents (a) annumcompoundedsemi-annually(b) annumcompoundedsemi-annually(c) annumcompoundedsemi-annually(d) annumcompoundedsemi-annually(e) annumcompoundedsemi-annuallyA768. (Comparingpresent values)Interest:13%compoundedsemi-annual lyBond:P= 20;000(1:065) 40+ 1050a40j:065= 16;463:62<18;000 Mortgage: Takingmonthlyrateto be1:055%P=240a132j:01055=17;055:05<18;00 0So,if youmustchoose,take (b)2i'16:35%per annumcompoundedsemi-annually. Thisis too (a)28(b) ,p=$7 ,P=$13003.(a)4/3millionbushelsfora pro tof $ (b)Lessthan3 $ :(a)2500(b)$1:75(c)$3256:(a)2000(b)$1:80 (c)50%(d)$200(e)$1007:(a)2050(b)$1:69 + tax(c)41%(d)$207:87(e)$89:50 Section41.
3 (a) 2% o (a)400(b)548(c)693 Section61)lna2)03)3x2+12x 3is notin00formasx!1 so onlythe rstapplicationof L'H^opital'sruleis )15)166)e32A777)e28)19)e 810) 12A78
