Hey all, I'm not sure how to do these questions and was wondering if anyone would be able to help me out
1. Geoff has a compound interest investment that earns interest compounding monthly. The balance of Geoff's compound interest investment was $4418.80 after 6 months. The balance of Geoff's compound interest investment was $4862.80 after 2 years. The amount of money that Geoff initially invested is closest to:
A. $4000
B. $4015
C. $4280
D. $4370
E. $4715
2. A printer was purchased for $680. After 4 years, the printer has a value of $125. On average, 1920 pages were printed every year during those 4 years. The value of the printer was depreciated using a unit cost method of depreciation. The depreciation in the value of the printer, per page printed, is closest to:
A. 3 cents
B. 4 cents
C. 5 cents
D. 6 cents
E. 7 cents
Thank you!
Hey, I don't have my calculator on me, but to solve question one you would use your financial calculator on the CAS.
Q1. Assuming that Geoff isn't adding money to this account, first you would want to calculate the annual interest rate. To do this enter the following in the financial solver.
N - 18 (24 months - 6 months)
I - (leave blank/0)
PV - -4418.80
Pmt - 0
FV - 4862.80
ppy - 12
cpy - 12
pmt at End.
Once you've found the annual interest rate, you can enter the following in your CAS,
N - 6 (Time taken to reach the first value mentioned)
PV - (0/leave blank)
I - (Enter value previously found)
Pmt - 0
FV - 4418.80
ppy - 12
cpy - 12
pmt at End.
This should give you your answer, (my guess is that it would be somewhere around $4280)
Q2. The Unit cost depreciation rule (from what I remember) is as follows
Vn = V0 - nD
V0 being the initial price of the asset
Vn being the value of the asset after n units of use
n being amount of 'uses'
D being cost of one 'use'
In this case, you are trying to find D. V0 = $680, 1920 x 4 = n (amount of uses) and Vn = $125.
In your cas you can simply type in Menu -> algebra -> solve (125 = 680 - (1920 x 4)x,x
This should give you your answer. Hope this helps