Math for Business and Life

GUESS AND CHECK SOLUTIONS

	ABOUT THE BOOK Overview Table of Contents Features The Learning Package What Instructors Say Sample Chapter ABOUT THE AUTHOR Who Is This John Webber Guy? STUDENT RESOURCES Step-by-Step Solutions Student Tutorial Get a Calculator Get a Student Solutions Manual or Text Tell Us What You Think Get a New $2 Bill CALCULATOR/TVM AIDS Online Calculator Calculator Information Guess and Check Solutions Derivation of Compound Interest Formulas INSTRUCTOR RESOURCES Order a Review Copy Instructor’s Resource Manual Testing Materials PowerPoint Presentations Comprehensive Exercise Masters for Overhead Transparencies Complimentary Products Updated Tax Rates, Etc.

In Math for Business and Life we solve time-value-of-money problems with four different methods: (1) compound interest formulas, (2) compound interest tables, (3) financial calculators, and (4) Excel. As you may recall, there is no compound interest formula that will calculate i when a periodic payment is involved; for these problems, we can use the Guess and Check Method.

With the Guess and Check Method we use one of the compound interest formulas, apply an estimated rate, and compare the result against a target figure. If the result is not close enough to the target figure, we use other rates until the result matches (or is sufficiently close to) the target figure. In this section of our website, we will offer a Guess and Check solution for problems that cannot be solved directly with formulas. Here are a few things to remember:

The compound interest formulas are shown in Illustration 9-1 of the text.
Appendix E of the text includes several mathematical concepts that are important in using the compound interest formulas: exponents, order of operations, chain calculations, reciprocals, and logarithms.
Calculator information is shown as a separate link on this website; keystrokes for several popular calculators are provided for each of the formulas.

The Guess and Check Solutions are in PDF format. You must have Acrobat Reader 4.0 or above. If you already have Acrobat Reader 4.0 or higher, click on the click on the chapter title below to bring up the Guess and Check solutions for that chapter; the solutions will be shown in a separate window. Note: You might have to wait a few seconds for each page to be loaded.

If you do not have Acrobat Reader or if you need an updated version, you can download the program for free by clicking on the icon below. Warning: Depending on your connection speed, this may take up to 30 - 50 minutes with a 56K modem.

11. Present Value and Rate of Return
12. Installment Loans and Open-End Credit
13. Home Ownership and Mortgage Loans
14. Investing
21. Insurance