MBF 101 Exercises 10,1 PDF

Title	MBF 101 Exercises 10,1
Course	Mathematics for Business
Institution	Seneca College
Pages	2
File Size	66.1 KB
File Type	PDF
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Exercises 10.1 Exercise 10.1, Solution 1: Payments are made at the end of every month and Compounding period (quarterly) = Payment period (quarterly). Therefore, this is an ordinary simple annuity.

12 Payment interval is 3 months. In one year, Aida would have to make 3 = 4 payments Therefore, number of payments in 5 years, 9 months (5.75 years) = 4 × 5.75 = 23 payments. . Exercise 10.1, Solution 3: Payments are made at the beginning of every quarter and Compounding period (quarterly) = Payment period (quarterly). Therefore, this is a simple annuity due.

12 Payment interval is 3 months. In one year, Melinda would have to make 3 = 4 payments Therefore, number of payments in 2 years = 4 × 2 = 8 payments. Exercise 10.1, Solution 5: Payments are made at the end of every month and Compounding period (semi-annually) ≠ Payment period (monthly). Therefore, this is an ordinary general annuity.

12 Payment interval is one month. In one year, Kapil would receive 1 = 12 payments Therefore, number of payments in 15 years = 12 × 15 = 180 payments. Exercise 10.1, Solution 7: Payments are made at the beginning of every month and Compounding period (annually) ≠ Payment period (monthly). Therefore, this is a general annuity due. Payment interval is one month. Therefore, number of payments in 3 years, 6 months (3 × 12 + 6 = 42 months) is 1 × 42 = 42 payments. Exercise 10.1, Solution 9: This forms two different annuities. 

1st annuity for 5 years with beginning-of-month payments (PMT = $1850) Payment period (monthly) ≠ Compounding period (semi-annually)

Therefore, it is a general annuity due. Payment interval is one month. Therefore, number of payments in 5 years (5 × 12 = 60 months) is 1 × 60 = 60 payments.



2nd annuity for 2 years with month-end payments (PMT = $3560) Payment period (monthly) ≠ Compounding period (quarterly)

Therefore, it is an ordinary general annuity. Payment interval is one month. Therefore, number of payments in 3 years (3 × 12 = 36 months) is 1 × 36 = 36 payments....