Page 10 - Mathematics of Business and Finance
P. 10
x Contents
10.7 Calculating Number of Payments (n ) and Time Period (t ) ......................................487
Ordinary Annuity .......................................................................................................487
Annuity Due ..............................................................................................................490
Exercises .................................................................................................................492
10.8 Calculating Periodic Interest Rate (i ) and Nominal Interest Rate (j ) .....................494
Exercises .................................................................................................................497
Review Examples ..........................................................................................................499
Review Exercises ..........................................................................................................505
Self-Test Exercises ........................................................................................................507
Spreadsheet Solutions ..................................................................................................512
Chapter 11
Other Types of Annuities 522
Introduction ...............................................................................................................523
11.1 Deferred Annuities ......................................................................................................523
Calculating Future Value and Present Value of a Deferred Annuity ..........................525
Exercises .................................................................................................................530
11.2 Perpetuities .................................................................................................................532
Exercises .................................................................................................................535
11.3 Constant-Growth Annuities .......................................................................................537
Exercises .................................................................................................................541
Review Exercises ..........................................................................................................543
Self-Test Exercises ........................................................................................................545
Spreadsheet Solutions ..................................................................................................548
Chapter 12
Amortization of Loans and Mortgages 552
Introduction ...............................................................................................................553
12.1 Amortization of Loans ................................................................................................553
Amortization Schedule .............................................................................................554
Constructing an Amortization Schedule ...................................................................554
Using Spreadsheets to Construct Amortization Schedules .....................................557
Calculating the Principal Balance .............................................................................559
Calculating the Final Payment ..................................................................................562
Calculating the Interest and Principal Portions of a Payment ..................................565
Constructing a Partial Amortization Schedule ..........................................................567
Exercises .................................................................................................................569
12.2 Mortgages ...................................................................................................................573
Types of Mortgages .................................................................................................573
Calculating Mortgage Payments and Principal Balance .........................................574
Qualifying for a Mortgage .........................................................................................579
Prepaying a Mortgage ..............................................................................................580
Exercises .................................................................................................................586
Review Exercises ..........................................................................................................590
Self-Test Exercises ........................................................................................................592
Spreadsheet Solutions ..................................................................................................596
