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1. Simple Operation of the Four Basic TVOM Formulas
Q. #1. Calculate the present value (PV) of a single sum under monthly compounding. (View problem and solution.)
Q. #18. Compute the FV of a single sum using annual compounding. (View problem and solution.)
Q. #19. Compute the FV of a single sum under different interest rates using monthly compounding. (View problem and solution.)
Q. #24. Calculate the future value (FV) of an ordinary annuity under annual compunding. (View problem and solution.)
Q. #27. Calculate the PV of a single sum using annual compounding. (View problem and solution.)
Q. #28. Calculate the present value (PV) of a single sum using monthly compounding. (View problem and solution.)
2. Find PV single sum
Q. #1. Calculate the present value (PV) of a single sum under monthly compounding. (View problem and solution.)
Q. #2. Compare the present value (PV) of a single sum under monthly and continuous compounding frequencies. (View problem and solution.)
Q. #3. Compare the present value (PV) of different amounts available at different times and under different rates in order to understand the impact that interest rate and term have on the valuation of a single sum. (View problem and solution.)
Q. #8. Calculate the effective interest rate (i) that will set equal a series of irregular and uneven cash inflows and outflows. (View problem and solution.)
Q. #9. Compare the present value (PV) of a single sum under different compounding frequencies; distinguish between nominal and effective interest rates. (View problem and solution.)
Q. #11. Calculate the PV of a single sum from the present and future values of another single sum with identical terms. (View problem and solution.)
Q. #14. Value a security sold prior to maturity after interest rates have fallen; calculate the PV and FV of a single sum using simple interest. (View problem and solution.)
Q. #16. Calculate the PV of an investment and the nominal (i) and effective (ieff) rates of interest; distinguish between nominal and effective rates of interest. (View problem and solution.)
Q. #17. Calculate the FV of an investment and then calculate the price (PV) of that invetsment if it is sold prior to maturity; understand the impact of changes in interest rates on security pricing. (View problem and solution.)
Q. #22. Calculate the PV of 3 payment options under simple interest. (View problem and solution.)
Q. #23. Calculate the payment amount (PMT) required to amortize a debt. Understand the concept of reinvested interest and the assumption that "money is always invested and productive..." (View problem and solution.)
Q. #27. Calculate the PV of a single sum using annual compounding. (View problem and solution.)
Q. #28. Calculate the present value (PV) of a single sum using monthly compounding. (View problem and solution.)
Q. #30. Calculate the PV of the retirement benefits you are promised until your actuarial death. (View problem and solution.)
Q. #35. Calculate the price of a bond (PV) when the market rate differs from the coupon rate. (View problem and solution.)
3. Find FV single sum
Q. #4. Calculate the nominal interest rate (i) and effective interest rate (ieff) and compare alternative investments. Consider the impact of non-interest rate related issues on investment return. (View problem and solution.)
Q. #5. Calculate the amount to which a single sum will grow (FV) under different compounding frequencies. (View problem and solution.)
Q. #6. Calculate the future value (FV) of an investment based on an interest rate (i) derived from another investment. (View problem and solution.)
Q. #12. Calculate the future value (FV) of a debt when payments are made that are irregular in both timing and amount; calculate interest for a fractional period. (View problem and solution.)
Q. #13. Compare the relative returns on two investments; calculate the future value (FV) of a single sum under simple and compound interest options. (View problem and solution.)
Q. #14. Value a security sold prior to maturity after interest rates have fallen; calculate the PV and FV of a single sum using simple interest. (View problem and solution.)
Q. #17. Calculate the FV of an investment and then calculate the price (PV) of that invetsment if it is sold prior to maturity; understand the impact of changes in interest rates on security pricing. (View problem and solution.)
Q. #18. Compute the FV of a single sum using annual compounding. (View problem and solution.)
Q. #19. Compute the FV of a single sum under different interest rates using monthly compounding. (View problem and solution.)
Q. #20. Derive the interest rate (i) used to grow a single sum to a certain FV and then use that rate to extend the growth further into the future; calculate i under different compounding frequencies. (View problem and solution.)
Q. #26. Calculate the dollar amount of interest earned and the effective annual rate of interest (ieff) . (View problem and solution.)
Q. #39. Calculate the intermediate balance and the new payment amount (PMT) when the interest rate on an adjustable rate loan (ARM) changes. (View problem and solution.)
4. Find PV annuity
Q. #7. Calculate the difference between the present value (PV) of an ordinary annuity and an annuity due. (View problem and solution.)
Q. #29. Calculate the present value (PV) of a stream of payments. Explain the concept of the present value of an annuity. (View problem and solution.)
Q. #30. Calculate the PV of the retirement benefits you are promised until your actuarial death. (View problem and solution.)
Q. #35. Calculate the price of a bond (PV) when the market rate differs from the coupon rate. (View problem and solution.)
Q. #36. Calculate the PV of the annual savings available with the purchase of new equipment using different costs of capital. (View problem and solution.)
5. Find FV annuity
Q. #24. Calculate the future value (FV) of an ordinary annuity under annual compunding. (View problem and solution.)
Q. #32. Calculate the amount to which a monthly payment will grow over time (i.e., the FV) assuming payments made 1) at the end of each month; and 2) the beginning of each month. (View problem and solution.)
Q. #39. Calculate the intermediate balance and the new payment amount (PMT) when the interest rate on an adjustable rate loan (ARM) changes. (View problem and solution.)
6. Find Payment Amount (PMT)
Q. #23. Calculate the payment amount (PMT) required to amortize a debt. Understand the concept of reinvested interest and the assumption that "money is always invested and productive..." (View problem and solution.)
Q. #31. Calculate the PMT to accumulate $1,000,000 in 30 years; calculate the PMT to draw down $1,000,000 in 20 years. (View problem and solution.)
Q. #33. Calculate the monthly PMT on a conventional 30-year fixed-rate mortgage (View problem and solution.)
Q. #34. Calculate the difference in the payment (PMT) on a 30- and a 15-year mortgage using the same interest rate and principal; compare the total interest paid under both mortgages. (View problem and solution.)
Q. #39. Calculate the intermediate balance and the new payment amount (PMT) when the interest rate on an adjustable rate loan (ARM) changes. (View problem and solution.)
7. Find Number of Payments (n)
Q. #10. Calculate how long it takes for an investment to double. (View problem and solution.)
Q. #37. Compute n for a single sum. (View problem and solution.)
8. Find Interest Rate (i) of Single Sum
Q. #4. Calculate the nominal interest rate (i) and effective interest rate (ieff) and compare alternative investments. Consider the impact of non-interest rate related issues on investment return. (View problem and solution.)
Q. #6. Calculate the future value (FV) of an investment based on an interest rate (i) derived from another investment. (View problem and solution.)
Q. #8. Calculate the effective interest rate (i) that will set equal a series of irregular and uneven cash inflows and outflows. (View problem and solution.)
Q. #15. Calculate the effective rate of interest (ieff) given a fixed monthly interest amount and principal balance; calculate the amount of the interest payment under quarterly compounding. (View problem and solution.)
Q. #16. Calculate the PV of an investment and the nominal (i) and effective (ieff) rates of interest; distinguish between nominal and effective rates of interest. (View problem and solution.)
Q. #20. Derive the interest rate (i) used to grow a single sum to a certain FV and then use that rate to extend the growth further into the future; calculate i under different compounding frequencies. (View problem and solution.)
9. Find Interest Rate (i) of Annuity
Q. #38. Manually calculate the interest rate (i) used in an annuity. Comment on the accuracy of calculating i using iteration and interpolation. (View problem and solution.)
10. Calculate the Effective Interest Rate
Q. #4. Calculate the nominal interest rate (i) and effective interest rate (ieff) and compare alternative investments. Consider the impact of non-interest rate related issues on investment return. (View problem and solution.)
Q. #9. Compare the present value (PV) of a single sum under different compounding frequencies; distinguish between nominal and effective interest rates. (View problem and solution.)
Q. #15. Calculate the effective rate of interest (ieff) given a fixed monthly interest amount and principal balance; calculate the amount of the interest payment under quarterly compounding. (View problem and solution.)
Q. #16. Calculate the PV of an investment and the nominal (i) and effective (ieff) rates of interest; distinguish between nominal and effective rates of interest. (View problem and solution.)
Q. #21. Calculate the effective interest rate (ieff) under different compounding frequencies and nominal interest rates. (View problem and solution.)
Q. #26. Calculate the dollar amount of interest earned and the effective annual rate of interest (ieff) . (View problem and solution.)
11. Caluclate Annuity Due
Q. #7. Calculate the difference between the present value (PV) of an ordinary annuity and an annuity due. (View problem and solution.)
Q. #32. Calculate the amount to which a monthly payment will grow over time (i.e., the FV) assuming payments made 1) at the end of each month; and 2) the beginning of each month. (View problem and solution.)
12. Mortgage Calculations
Q. #33. Calculate the monthly PMT on a conventional 30-year fixed-rate mortgage (View problem and solution.)
Q. #34. Calculate the difference in the payment (PMT) on a 30- and a 15-year mortgage using the same interest rate and principal; compare the total interest paid under both mortgages. (View problem and solution.)
Q. #39. Calculate the intermediate balance and the new payment amount (PMT) when the interest rate on an adjustable rate loan (ARM) changes. (View problem and solution.)
13. Retirement Benefit Calculations
Q. #30. Calculate the PV of the retirement benefits you are promised until your actuarial death. (View problem and solution.)
Q. #31. Calculate the PMT to accumulate $1,000,000 in 30 years; calculate the PMT to draw down $1,000,000 in 20 years. (View problem and solution.)
14. Lottery Calculations
Q. #29. Calculate the present value (PV) of a stream of payments. Explain the concept of the present value of an annuity. (View problem and solution.)
15. Bond & T-Bill Calculations
Q. #17. Calculate the FV of an investment and then calculate the price (PV) of that invetsment if it is sold prior to maturity; understand the impact of changes in interest rates on security pricing. (View problem and solution.)
Q. #25. Calculate the price and bond equivalent yield on a T-Bill. Compare the price of a T-Bill calculated with the special "Yield on Discount Basis" formula with that of the standard present value (PV) calculation. (View problem and solution.)
Q. #35. Calculate the price of a bond (PV) when the market rate differs from the coupon rate. (View problem and solution.)
16. Evaluate Investment Alternatives
Q. #2. Compare the present value (PV) of a single sum under monthly and continuous compounding frequencies. (View problem and solution.)
Q. #3. Compare the present value (PV) of different amounts available at different times and under different rates in order to understand the impact that interest rate and term have on the valuation of a single sum. (View problem and solution.)
Q. #4. Calculate the nominal interest rate (i) and effective interest rate (ieff) and compare alternative investments. Consider the impact of non-interest rate related issues on investment return. (View problem and solution.)
Q. #5. Calculate the amount to which a single sum will grow (FV) under different compounding frequencies. (View problem and solution.)
Q. #9. Compare the present value (PV) of a single sum under different compounding frequencies; distinguish between nominal and effective interest rates. (View problem and solution.)
Q. #10. Calculate how long it takes for an investment to double. (View problem and solution.)
Q. #13. Compare the relative returns on two investments; calculate the future value (FV) of a single sum under simple and compound interest options. (View problem and solution.)
Q. #19. Compute the FV of a single sum under different interest rates using monthly compounding. (View problem and solution.)
Q. #21. Calculate the effective interest rate (ieff) under different compounding frequencies and nominal interest rates. (View problem and solution.)
Q. #22. Calculate the PV of 3 payment options under simple interest. (View problem and solution.)
Q. #32. Calculate the amount to which a monthly payment will grow over time (i.e., the FV) assuming payments made 1) at the end of each month; and 2) the beginning of each month. (View problem and solution.)
Q. #34. Calculate the difference in the payment (PMT) on a 30- and a 15-year mortgage using the same interest rate and principal; compare the total interest paid under both mortgages. (View problem and solution.)
Q. #36. Calculate the PV of the annual savings available with the purchase of new equipment using different costs of capital. (View problem and solution.)
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