Exam 3: Mathematics of Finance

Find the rate of interest required to achieve the conditions set forth. -If Jay bought a lot for $8,000 and sold it 15 years later for $24,000,what was her percentage rate of return on this investment if it was compounded annually?

Use an amortization table to solve the problem. Round to the nearest cent. -The monthly payments on a $76,000 loan at 12% annual interest are $836.76.How much of the first monthly payment will go toward interest?

Solve the problem. -At the end of every 3 months,Judy deposits $100 into an account that pays 6% compounded quarterly.After 4 years,she puts the accumulated amount into a certificate of deposit paying 7.5% compounded semiannually for 1 year.When this certificate matures,how much will Judy have accumulated?

You have decided to buy a new stereo system for $2,500 and agreed to pay in 30 equal quarterly payments at 1.25% interest per quarter on the unpaid balance.How much are your payments?

Find the compound amount for the deposit. Round to the nearest cent. -$600 at 8% compounded quarterly for 5 years

Find the compound interest earned. Round to the nearest cent. -$14,000 at 5% compounded annually for 3 years

Use the future value formula to find the indicated value. Round to three decimal places. -n = 13; i = 0.04; PMT = $1000; FV = ?

You have purchased a new house and have a mortgage for $90,000 at 6% compounded monthly.The loan is amortized over 20 years in equal monthly payments of $644.79.Find the total amount paid in interest when the mortgage is paid off.

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing cycle. Use a 365-day year. -Month: April (30 days)Previous month's balance: $960 Interest rate: 21%

Provide an appropriate response. -An investor purchased 150 shares of a stock at $15.80 per share.The investor holds the stock for 39 weeks and then sells the stock for $19.25 per share.Use the commission schedule for this company given below to find the annual rate of interest earned by this investor.Express your answer as a percentage,correct to one decimal place.

Use an amortization table to solve the problem. Round to the nearest cent. -The monthly payments on a $73,000 loan at 13% annual interest are $807.38.How much of the first monthly payment will go toward the principal?

Provide an appropriate response. -An investor purchased 500 shares of a stock at $19 per share.The commission she paid to buy the stock was $65 plus 0.3% of the principal amount.Six months later she sold the stock for $20.50 per share.If she paid the same rate of commission to sell the stock,what annual rate of interest (annual yield)did she earn on her initial investment (including purchase price plus commission)? Express your answer as a percentage,correct to one decimal place.

How many months will it take until an account will have $3,500 if $2,500 is invested now at 5% compounded monthly?

Solve the problem. Round to the nearest cent as needed. -Cheraw Auto Repair believes that it will need new equipment in 10 years.The equipment will cost $26,000. What lump sum should be invested today at 8% compounded semiannually,to yield $26,000?

An ordinary annuity has a value of $1,333.85 at the end of 4 years when $150 is deposited every 6 months into an account earning 6% compounded semiannually.How much interest has been earned?

Solve the problem. Round to the nearest cent as needed. -A bank has $750,000 to lend for 7 months.It can lend it to a local contractor at a simple interest rate of 12%,or it can lend it to a small business that will pay 12% compounded monthly.If the bank wants to maximize its interest earned,who should receive the loan (contractor or business)and what is the additional interest earned?

A bank makes a home mortgage loan of $180,000 at 7.25% amortized in equal monthly payments over 30 years. What is the total amount paid in interest when the mortgage is paid off (round to the nearest dollar)?

Solve for the missing value. Round to four decimal places. -n = 30; i = 0.03; PMT = $100; PV = ?

Solve the problem. Assume no new purchases are made with the credit card. -The annual interest rate on a credit card is 20.99%.If a payment of $100.00 is made each month,how long will it take to pay off an unpaid balance of $1546.15?

Provide an appropriate response. -If an investor buys a 39-week T-bill with a maturity value of $25,000 for $23,543 what annual interest rate (annual yield)will the investor earn? (Express your answer as a percentage,correct to one decimal place.)