Part -1:
1. Determine in, n, and i for money invested at 4.1% compounded quarterly for 4 years.
m =
n =
i =
2. What is the maturity value of a 8-year term deposit of $4634.41 at 4.7% compounded annually? How much interest did the deposit earn?
The maturity value of the term deposit is
The amount of interest earned is
3. An investment of $2288.73 earns interest at 4.5% per atrium compounded monthly for 4 years. At that time the interest rate is changed to 1.9% compounded annually. How much will the accumulated value be 3.5 years after the change?
The accumulated value is
4. An investment of $4700 earns interest at 7% per annum compounded quarterly for six years. At that time the interest rate is changed to 6.7% compounded monthly. How much will the accumulated value be three years after the change?
The accumulated value is.
5. Find the future value of the following investment.
Nominal Frequency of
Principal Rate Conversion Time
$5100.00 4.3% annually 5 years
The future value is .
6. The Continental Bank advertises capital savings at 7.9% compounded annually while TD Canada Trust offers premium savings at 7.65% compounded monthly. Suppose you have $1500 to invest for two years.
(a) Which deposit will earn more interest?
(b) What is the difference in the amount of interest?
7. Find present value and the compound discount of $3009.06 due 8 years from now if money is worth 8.7% compounded annually.
The present value of the money is
The compound discount is
8. What is the principal that wit grow to $3300 in six years, five months at 6.9% compounded annually?
The principal is
9. In winning the lottery, you have the choice of receiving $80,000 now or $32,000 now and $56,000 two years from now. In terms of today's dollar, which choice is better and by how much? Money is worth 4.75% compounded annually.
Which investment is better?
QA. They are equal in value.
OB. The choice of $80,000 now is better.
olfec. The choice of $32,000 now and $56,000 in two years is better.
The better investment is greater than the other investment by $ 3036.39 in terms of today's dollar.
10. A loan of $5100 is due in 6 years. If money is worth 4% compounded annually, find the equivalent payments that would settle the debt at the times shown below.
(a) now (b) in 2 years
(c) in 6 years (d) in 10 years
(a) The equivalent loan payment is
(b) The equivalent loan payment is
(c) The equivalent loan payment is
(d) The equivalent loan payment is
11. Two debts, the first of $600 due three months ago and the second of $2000 borrowed two years ago for a term of five years at 3.3% compounded annually, are to be replaced by a single payment one year from now. Determine the size of the replacement payment if interest is 4.3% compounded quarterly and the focal date is one year from now.
The size of the replacement payment is
What is the size of the equal payments that must be made at the end of each of the next four years to settle a debt of $6000 due four years from now and subject to interest at 7% compounded semi-annually?
All of the equal payments are for
Part -2:
1. How long will it take $900.00 to accumulate to $1066.00 at 9% p.a. compounded monthly? State your answer in years and months (from 0 to 11 months).
The investment will take year(s) and month(s) to mature.
2. In how many months will money double at 9% p.a. compounded semi-annually? State your answer in years and months (from 0 to 11 months).
3. In year(s) and month(s) the money will double at 9% p.a. compounded semi-annually. Determine the number of compounding periods for the following investment.
|
Principal
$2784
|
Future Value Interest Rate Frequency of
Conversion
$3301 7.7% semi-annually
|
The number of compounding periods is D.
(Round the final answer to two decimal places as needed. Round all intermediate values to six decimal places as needed.)
4. What is the nominal annual rate of interest compounded quarterly at which $1817.00 will accumulate to $2561.24 in seven years and nine months?
The nominal annual rate of interest is %.
(Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.)
5. Juana deposited $300.00 into a savings account that compounded interest monthly. What nominal annual rate compounded monthly was earned on the investment if the balance was $591.40 in seven years?
The nominal annual rate of interest is per annum compounded monthly.
(Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.)
6. Find the nominal annual rate of interest for the following investment.
Principal Future Value Time Due Frequency of Conversion
$559.00 $2828.03 8 years quarterly
7. The nominal annual rate of interest is I % compounded quarterly.
(Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.)
8. What is the effective annual rate of interest if $1100.00 grows to $1500.00 in three years compounded semi-annually?
The effective annual rate of interest as a percent is %.
(Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.)
9. What is the nominal rate of interest compounded monthly if the effective rate of interest on an investment is 9.1%?
The nominal rate of interest is 0% compounded monthly.
(Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.)
10. A bank pays 10.6% compounded semi-annually on certain types of deposits. If interest is compounded quarterly, what nominal rate of interest wit maintain the same effective rate of interest?
The nominal rate of interest is 11%.
(Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.)
11. Find the nominal annual rate of interest compounded semi-annually that is equivalent to 8.9% compounded quarterly.
The nominal annually compounded rate of interest is %.
(Round the final answer to four decimal places as needed. Round all intermediate values to six decimal places as needed.)