Exam 9: Compound Interest - Future Value and Present Value

An seven-year promissory note for $31 000 dated May 2, 2002, bearing interest at 8% compounded quarterly, is discounted on September 2, 2005, at 8.5% compounded semi-annually. Determine the proceeds of the note.

A variable rate demand loan showed an initial balance of $20 000.00, payments of $5000.00 after six months, $10000.00 after one year, and a final payment after two years. Interest was 6% compounded semi-annually for the first year and 12% compounded monthly for the remaining time. How much was the size of the final payment?

A $17 200 debt will accumulate for six years at 11.6% compounded semi-annually. For how much will the debt sell four years after it was incurred if the buyer of the debt charges 9% compounded quarterly?

How much will a registered retirement savings deposit of $10 000.00 be worth in 15 years at 6.00% compounded quarterly? How much of the amount is interest?

A $100 000 face value strip bond has 6 years remaining until maturity. If the current market return rate is 4% compounded semi-annually, what is the fair market value of the strip bond?

What is the cash value of $5000 if it is discounted for 5 years at 10% compounded yearly?

You have an investment that will mature in 20 months with the value of $2500. You need some quick cash and decide to sell it today at a discount rate of 10% compounded quarterly. What is the cash value?

A five year promissory note with a face value of $5000, bearing interest at 6% compounded semi-annually, was sold 18 months after its issue date to yield the buyer 4% compounded quarterly. What amount was paid for the note?

Payments of $10 200.00 due one year ago and $13 000.00 due nine months ago are to be replaced by a payment of $5800.00 now, a second payment of $10 000.00 fifteen months from now, and a final payment twenty-four months from now. What is the size of the final payment if interest is 9.2% compounded quarterly?

You owe $4510 due in 7 months. In addition you owe $3780 due in 13 months and $5125 due in 21 months. You are paying 8.64% compounded monthly on your loan. What single amount three months from now will pay off the entire loan of the three future payments?

A three-year, $12 000 promissory note bearing interest at 11.6% compounded quarterly is discounted two years after the date of issue at 9.64% compounded semi-annually. What are the proceeds of the note?

Calculate the future value of $5000 if it is invested at an interest rate of 16% compounded quarterly for 5 years and 6 months.

You invest $10 000 in a savings account that pays interest of 8% compounded monthly. What is the value of your account after 14 months?

Two years after Michelle deposited $25 000 in a TD Bank savings account that earned interest at 2.25% compounded monthly, the rate of interest was changed to 5.75% compounded semi-annually. How much was in the account fifteen years after the deposit was made?

Determine the sum of money that will grow to $18 530 in four years, eleven months at 5.2% compounded quarterly.

Determine the nominal rate of interest if the periodic rate is 1.75% per quarter.

Calculate the future value of $4200 if it is invested at an interest rate of 8.6% compounded quarterly for 3 years and 10 months.

Aaron is planning to go on a vacation in 6 years. The vacation $7800.00. How much should he set-aside today in his savings account if the current interest rate is 7.6% p.a., compounded quarterly?

Find the compound interest earned by $1910 invested at 7.5% compounded semi-annually for seven years.

Calculate the accumulated value of $1000.00 at 8% compounded monthly for 12 years.