Solving FE Problems

How to use this section: Each problem-type (What to do) is labeled and a solution approach (How to do it) is detailed.

Solved examples of FE-like problems using the solution approach are presented, followed by a reference to related FE review problems included in Section B of this material. Once you understand the solution approach here, you should be able to proceed to the referenced FE review problems. A good strategy is to cover several of the sections here, then go to the FE review problems in Section B to determine how well you can do.

1. What to do: Identify Nominal and Effective Interest Rates

2. What to do: Find an Effective Interest Rate from a Nominal Rate and Vice Versa

3. What to do: Find P or F for Single Payments and Nominal Interest Rates

4. What to do: Compare Alternatives by PW or AW Analysis

5. What to do: Find the Present Worth of a Bond

6. What to do: Find the Present Worth When Inflation is Considered

7. What to do: Determine Asset Depreciation by SL or MACRS Methods

8. What to do: Find Asset Book Value by SL or MACRS

9. What to do: Find the Breakeven Point