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Text File  |  1993-03-20  |  2KB  |  19 lines

  1. "AST1CAL3 EQUATION VARIABLE |N 7 0N|","03-20-1993","15:35:42"
  2. "EXPECT$=RND(SUCCPROB*SUM$) FREQCONV=12/CMPERIOD NPERIODS=FREQCONV*NUMYEARS RATE%PER=ANNRATE%/FREQCONV EFFRATE%=RND(100*((1+RATE%PER/100)^FREQCONV-1)) PRESVALU=RND(EXPECT$*(1+RATE%PER/100)^-NPERIODS)"
  3. "STATISTICAL PROBABILITY, EXPECTATION. If a certain event is    known to happen SUCCESS# times in NTRIALS occurrences from empirical            observations then it is considered to have STATISTICAL probability of           SUCCESS#/NTRIALS of being successful. If SUCCPROB is the probability of         receiving a SUM$, then SUCCPROB*SUM$ is its expectation EXPECT$. If money earns a simple annual rate of ANNRATE% with a compounding period CMPERIOD in months,  CMPERIOD=1 for monthly, =3 for quarterly, =6 for semiannually, =12 for yearly.  then PRESVALU is the present value of the expectation EXPECT$ in NUMYEARS from  today. EFFRATE% is the effective or yearly rate percent for money.                                                                                              *** Answers to problems ***    (c) Copyright PCSCC Inc., 1993                   (a) Set ANNRATE%=7, CMPERIOD=12, NUMYEARS=4, SUCCPROB=.12, SUM=10,000.  The     present value is PRESVALU=$915.47.  The government should invest $915.47 at 7%  to cover its future obligation to Mr. Souza.                                                          Type any key to exit.                                                                                                                                    ||From studies of graduation records at ACME Tech, it was found  that over the last 30 years, the probability that an accepted veteran student   will graduate 4 years later is 0.12.  The government has promised Mr. Souza, a  veteran, a $10,000 bonus upon his graduation 4 years from today.  (a) If money  is worth 7%, find the value of his $10,000 expectation today.                         Type comma key to see answers.  Type (F2) to return to helpfile."
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