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If you deposited $5,000 in your saving account three years ago and you will collect them now as $5,955.08: What was your account interest for the past three years? Use excel sheet to show your calculations, take a snap shot and paste it in the MS Word answer document. Using the same interest rate that you calculated if you left your money in the bank how long would it take for the initial deposited amount to double? Use the tables in the back of the book to find the discount factor of an institution that provides 11% compound interest after 6 years of investment. Which institution would you prefer, this one or the first one? Why?

If you deposited $5,000 in your saving account three years ago and you will collect them now as $5,955.08: What was your account interest for the past three years? Use excel sheet to show your calculations, take a snap shot and paste it in the MS Word answer document. Using the same interest rate that you calculated if you left your money in the bank how long would it take for the initial deposited amount to double? Use the tables in the back of the book to find the discount factor of an institution that provides 11% compound interest after 6 years of investment. Which institution would you prefer, this one or the first one? Why?

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.2IP
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Please show all work and how this was done in Excel

 

If you deposited $5,000 in your saving account three years ago and you will collect them now as $5,955.08:

What was your account interest for the past three years? Use excel sheet to show your calculations, take a snap shot and paste it in the MS Word answer document.

Using the same interest rate that you calculated if you left your money in the bank how long would it take for the initial deposited amount to double?

Use the tables in the back of the book to find the discount factor of an institution that provides 11% compound interest after 6 years of investment. Which institution would you prefer, this one or the first one? Why?

 

11.0% N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 35 40 45 50 55 60 Single Payment Compound Present Amount Worth Factor Factor (F/PLN) (P/ELN) 1.1100 1.2321 1.3676 1.5181 1.6851 1.8704 2.0762 2.3045 2.5580 2.8394 3.1518 3.4985 3.8833 4.3104 4.7846 5.3109 5.8951 6.5436 7.2633 8.0623 8.9492 9.9336 11.0263 12.2392 13.5855 15.0799 16.7386 18.5799 20.6237 22.8923 0.9009 0.8116 0.7312 0.6587 0.5935 65.0009 109.5302 184.5648 311.0025 524.0572 0.5346 0.4817 0.4339 0.3909 0.3522 0.3173 0.2858 0.2575 0.2320 0.2090 0.1883 0.1696 0.1528 0.1377 0.1240 0.1117 0.1007 0.0907 0.0817 0.0736 0.0663 0.0597 0.0538 0.0485 0.0437 25.4104 0.0394 28.2056 0.0355 31.3082 0.0319 34.7521 0.0288 38.5749 0.0259 Compound Amount Factor (F/A,L,N) 1.0000 2.1100 3.3421 4.7097 6.2278 7.9129 9.7833 11.8594 14.1640 16.7220 39.1899 44.5008 50.3959 56.9395 64.2028 72.2651 81.2143 91.1479 102.1742 114.4133 19.5614 0.0511 22.7132 0.0440 26.2116 0.0382 30.0949 0.0332 34.4054 0.0291 Equal Payment Series Sinking Present Fund Worth Factor Factor (A/ELN) (P/A,L,N) 221.9132 247.3236 1.0000 0.4739 0.2992 0.2123 0.1606 0.1264 0.1022 0.0843 0.0706 0.0598 581.8261 986.6386 0.0255 0.0225 0.0198 0.0176 0.0156 127.9988 0.0078 143.0786 0.0070 159.8173 0.0063 178.3972 0.0056 199.0209 0.0050 0.0138 0.0123 0.0110 0.0098 0.0087 0.0045 0.0040 275.5292 0.0036 306.8374 0.0033 341.5896 0.0029 0.0154 0.0017 0.0091 0.0010 1668.7712 0.0006 0.0054 0.0032 2818.2042 0.0004 0.0019 4755.0658 0.0002 0.9009 1.7125 2.4437 3.1024 3.6959 4.2305 4.7122 5.1461 5.5370 5.8892 6.2065 6.4924 6.7499 6.9819 7.1909 7.3792 7.5488 7.7016 7.8393 7.9633 8.0751 8.1757 8.2664 8.3481 8.4217 8.4881 8.5478 8.6016 8.6501 8.6938 8.7331 8.7686 8.8005 8.8293 8.8552 8.9511 9.0079 9.0417 9.0617 9.0736 Gradient Series Capital Gradient Gradient Recovery Uniform Present Factor Series Worth (A/PLN) (A/G,L,N) (P/G,4,N) N 1.1100 0.5839 0.4092 0.3223 0.2706 0.2364 0.2122 0.1943 0.1806 0.1698 0.1611 0.1540 0.1482 0.1432 0.1391 0.1355 0.1325 0.1298 0.1276 0.1256 0.1238 0.1223 0.1210 0.1198 0.1187 0.1178 0.1170 0.1163 0.1156 0.1150 0.1145 0.1140 0.1136 0.1133 0.1129 0.1117 0.1110 0.1106 0.1104 0.1102 0.0000 0.4739 0.9306 1.3700 1.7923 2.1976 2.5863 2.9585 3.3144 3.6544 3.9788 4.2879 4.5822 4.8619 5.1275 5.3794 5.6180 5.8439 6.0574 6.2590 6.4491 6.6283 6.7969 6.9555 7.1045 7.2443 7.3754 7.4982 7.6131 7.7206 7.8210 7.9147 8.0021 8.0836 8.1594 8.4659 8.6763 8.8185 8.9135 8.9762 0.0000 0.8116 2.2740 4.2502 6.6240 9.2972 12.1872 15.2246 18.3520 21.5217 39.6953 42.4095 45.0074 47.4856 49.8423 61.4900 16 67.1210 1 24.6945 11 27.8388 12 30.9290 13 33.9449 14 36.8709 15 68.3016 69.4007 70.4228 71.3724 72.2538 2345 75.7789 78.1551 79.7341 80.7712 81.4461 5 6 7 8 9 10 LEXAR 234 22 58 16 17 52.0771 21 54.1912 56.1864 58.0656 59.8322 18 19 20 22 63.0433 64.4965 28 65.8542 25 26 27 29 30 31 32 33 34 35 40 45 50 55 60
Transcribed Image Text:11.0% N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 35 40 45 50 55 60 Single Payment Compound Present Amount Worth Factor Factor (F/PLN) (P/ELN) 1.1100 1.2321 1.3676 1.5181 1.6851 1.8704 2.0762 2.3045 2.5580 2.8394 3.1518 3.4985 3.8833 4.3104 4.7846 5.3109 5.8951 6.5436 7.2633 8.0623 8.9492 9.9336 11.0263 12.2392 13.5855 15.0799 16.7386 18.5799 20.6237 22.8923 0.9009 0.8116 0.7312 0.6587 0.5935 65.0009 109.5302 184.5648 311.0025 524.0572 0.5346 0.4817 0.4339 0.3909 0.3522 0.3173 0.2858 0.2575 0.2320 0.2090 0.1883 0.1696 0.1528 0.1377 0.1240 0.1117 0.1007 0.0907 0.0817 0.0736 0.0663 0.0597 0.0538 0.0485 0.0437 25.4104 0.0394 28.2056 0.0355 31.3082 0.0319 34.7521 0.0288 38.5749 0.0259 Compound Amount Factor (F/A,L,N) 1.0000 2.1100 3.3421 4.7097 6.2278 7.9129 9.7833 11.8594 14.1640 16.7220 39.1899 44.5008 50.3959 56.9395 64.2028 72.2651 81.2143 91.1479 102.1742 114.4133 19.5614 0.0511 22.7132 0.0440 26.2116 0.0382 30.0949 0.0332 34.4054 0.0291 Equal Payment Series Sinking Present Fund Worth Factor Factor (A/ELN) (P/A,L,N) 221.9132 247.3236 1.0000 0.4739 0.2992 0.2123 0.1606 0.1264 0.1022 0.0843 0.0706 0.0598 581.8261 986.6386 0.0255 0.0225 0.0198 0.0176 0.0156 127.9988 0.0078 143.0786 0.0070 159.8173 0.0063 178.3972 0.0056 199.0209 0.0050 0.0138 0.0123 0.0110 0.0098 0.0087 0.0045 0.0040 275.5292 0.0036 306.8374 0.0033 341.5896 0.0029 0.0154 0.0017 0.0091 0.0010 1668.7712 0.0006 0.0054 0.0032 2818.2042 0.0004 0.0019 4755.0658 0.0002 0.9009 1.7125 2.4437 3.1024 3.6959 4.2305 4.7122 5.1461 5.5370 5.8892 6.2065 6.4924 6.7499 6.9819 7.1909 7.3792 7.5488 7.7016 7.8393 7.9633 8.0751 8.1757 8.2664 8.3481 8.4217 8.4881 8.5478 8.6016 8.6501 8.6938 8.7331 8.7686 8.8005 8.8293 8.8552 8.9511 9.0079 9.0417 9.0617 9.0736 Gradient Series Capital Gradient Gradient Recovery Uniform Present Factor Series Worth (A/PLN) (A/G,L,N) (P/G,4,N) N 1.1100 0.5839 0.4092 0.3223 0.2706 0.2364 0.2122 0.1943 0.1806 0.1698 0.1611 0.1540 0.1482 0.1432 0.1391 0.1355 0.1325 0.1298 0.1276 0.1256 0.1238 0.1223 0.1210 0.1198 0.1187 0.1178 0.1170 0.1163 0.1156 0.1150 0.1145 0.1140 0.1136 0.1133 0.1129 0.1117 0.1110 0.1106 0.1104 0.1102 0.0000 0.4739 0.9306 1.3700 1.7923 2.1976 2.5863 2.9585 3.3144 3.6544 3.9788 4.2879 4.5822 4.8619 5.1275 5.3794 5.6180 5.8439 6.0574 6.2590 6.4491 6.6283 6.7969 6.9555 7.1045 7.2443 7.3754 7.4982 7.6131 7.7206 7.8210 7.9147 8.0021 8.0836 8.1594 8.4659 8.6763 8.8185 8.9135 8.9762 0.0000 0.8116 2.2740 4.2502 6.6240 9.2972 12.1872 15.2246 18.3520 21.5217 39.6953 42.4095 45.0074 47.4856 49.8423 61.4900 16 67.1210 1 24.6945 11 27.8388 12 30.9290 13 33.9449 14 36.8709 15 68.3016 69.4007 70.4228 71.3724 72.2538 2345 75.7789 78.1551 79.7341 80.7712 81.4461 5 6 7 8 9 10 LEXAR 234 22 58 16 17 52.0771 21 54.1912 56.1864 58.0656 59.8322 18 19 20 22 63.0433 64.4965 28 65.8542 25 26 27 29 30 31 32 33 34 35 40 45 50 55 60
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