Lea, Paul, Tynos invests in a business in the ratio 1:3:5. If the profit from the business is
R450 000, how much will each get?
Answers
Answer: Chapter 3
Equivalence
A Factor Approach
3-1
If you had $1,000 now and invested it at 6%, how much would it be worth 12 years from now?
Solution
F = 1,000(F/P, 6%, 12) = $2,012.00
3-2
Mr. Ray deposited $200,000 in the Old and Third National Bank. If the bank pays 8% interest,
how much will he have in the account at the end of 10 years?
Solution
F = 200,000(F/P, 8%, 10) = $431,800
3-3
If you can earn 6% interest on your money, how much is $1,000 paid to you 12 years in the future
worth to you now?
Solution
P = 1,000(P/F, 6%, 12) = $497.00
3-4
Determine the value of P using the appropriate factor.
Solution
P = F(P/F, 6%, 5) = $500(0.7473) = $373.65
3-5
Downtown is experiencing an explosive population growth of 10% per year. At the end of 2005
F = $500
i = 6%
P
0 1 2 3 4 550 Chapter 3 Equivalence – A Factor Approach
the population was 16,000. If the growth rate continues unabated, at the end of how many years
will it take for the population to triple?
Solution
Use i = 10% to represent the growth rate.
48,000 = 16,000(F/P, 10%, n)
(F/P, 10%, n) = 48,000/16,000
= 3.000