Question 1

$4000 is deposited into an account earning j2 = 8% for the first 2 years and j2 = 10% thereafter.How long will it take for it to grow to $9041.67?

Accepted Answer

A) 6 yrs,9 months 
B) 8 yrs,9 months 
C) 13 yrs,6 months 
D) 17 yrs,6 months 
A) 6 yrs,9 months 
B) 8 yrs,9 months 
C) 13 yrs,6 months 
D) 17 yrs,6 months

Question 2

An investment has the following interest rates: j2 = 6% for the first 30 months,followed by j4 = 8% for the next 36 months,followed by j6 = 9% for the last 18 months.What is the equivalent j2 earned over the 7 year period?

Accepted Answer

A) 6.24% 
B) 6.68% 
C) 7.56% 
D) 7.70% 
A) 6.24% 
B) 6.68% 
C) 7.56% 
D) 7.70%

Question 3

You are investing a sum of money.Rank the following interest in order of which one will give you the most interest.
a. j2 = 8%
b. j52 = 7.9%
c. δ = j∞ = 7.85%

Accepted Answer

A) b > a > c 
B) a > c > b 
C) c > a > b 
D) b > c > a 
A) b > a > c 
B) a > c > b 
C) c > a > b 
D) b > c > a

Question 4

What simple interest rate,r,is equivalent to j12 = 9% over a 2-year period?

Accepted Answer

A) 9.82% 
B) 9.41% 
C) 9.38% 
D) 8.30% 
A) 9.82% 
B) 9.41% 
C) 9.38% 
D) 8.30%

Question 5

What is the value,in 18 months,of an investment of $10,000 made today if interest is compounded continuously at 6.5%?

Accepted Answer

A) $32,219.93 
B) $11,024.11 
C) $11,021.21 
D) $10,987.96 
A) $32,219.93 
B) $11,024.11 
C) $11,021.21 
D) $10,987.96

Question 6

You deposit $10,000 today in a fund earning interest at j× = 8%.How much will you have accumulated at the end of 21 months?

Accepted Answer

A) $11,502.74 
B) $11,497.40 
C) $11,441.73 
D) $10,832.87 
A) $11,502.74 
B) $11,497.40 
C) $11,441.73 
D) $10,832.87

Question 7

A single deposit of $25,000 is made into an account that earns interest at j4 = 7% for one year,j2 = 6% for the next year and j6 = 3% thereafter.How much interest is earned in the fourth year?

Accepted Answer

A) $143.93 
B) $863.58 
C) $889.82 
D) $916.85 
A) $143.93 
B) $863.58 
C) $889.82 
D) $916.85

Question 8

The 1996 Canada Savings Bond issue offered the following annual rates,guaranteed over 10 years: 3% in the first year,followed by 4%,5%,6%,6.50%,6.75%,7%,7,25%,8% and 8.75% in the 10th year.If you buy one of these bonds today and cash it in after 5 years,what annual rate of return do you earn?

Accepted Answer

A) 4.89% 
B) 5.39% 
C) 6.21% 
D) 6.50% 
A) 4.89% 
B) 5.39% 
C) 6.21% 
D) 6.50%

Question 9

A long-term promissory note for $40,000 is taken out on June 15,2010.The interest rate on the note is j4 = 7% and the note is due on December 15,2015.What is the maturity value of the note?

Accepted Answer

A) $58,589.15 
B) $58,398.79 
C) $58,597.50 
D) $57,581.47 
A) $58,589.15 
B) $58,398.79 
C) $58,597.50 
D) $57,581.47

Question 10

An individual borrowed $10 000 nine months ago and another $6000 three months ago and he wishes to pay off this loan with a payment of $X today.You are given that j2 = 10% and that the practical method of crediting/charging interest is used.Determine $X.

Accepted Answer

A) $16 918.90 
B) $16 912.50 
C) $16 907.46 
D) $16 900.26 
A) $16 918.90 
B) $16 912.50 
C) $16 907.46 
D) $16 900.26

Question 11

You invest a sum of money at j12 = 15% for 3 years,followed by j4 = 12% for 4 years.What equivalent rate of return,j1,do you earn over each of the 7 years?

Accepted Answer

A) 13.29% 
B) 13.50% 
C) 13.79% 
D) 14.05% 
A) 13.29% 
B) 13.50% 
C) 13.79% 
D) 14.05%

Question 12

Payments of $1000 due in 6 months,$1500 due in 9 months,and $1200 due in 15 months are to be exchanged for a single payment $X due in 12 months.What is X if j4 = 6%?

Accepted Answer

A) $3770.73 
B) $3734.99 
C) $3809.54 
D) $3927.05 
A) $3770.73 
B) $3734.99 
C) $3809.54 
D) $3927.05

Question 13

You shop around for the best interest rate and have narrowed your choices to the following:
Bank I: j1 = 12%
Bank II: j4 = 11.55%
Bank III: j12 = 11.30%
You wish to have $S in 3 years.What is the present value of S? Put the banks in order,from lowest to highest present value of S.

Accepted Answer

A) I < II < III 
B) III < II < I 
C) II < I < III 
D) III < I < II 
A) I < II < III 
B) III < II < I 
C) II < I < III 
D) III < I < II

Question 14

You borrow $2000 today.This loan is due in 3-years with interest at j1 = 9%.It is agreed that you will instead pay $1000 one-year from now and $X two-years from now.If money is worth j2 = 6%,what is the value of X?

Accepted Answer

A) $1190.12 
B) $1286.20 
C) $1380.48 
D) $1529.16 
A) $1190.12 
B) $1286.20 
C) $1380.48 
D) $1529.16

Question 15

A loan of $A is taken out today.You are given that this loan is to be paid off with a payment of $20,000 in 3 years and 8 months.Determine A,if j2 = 10% and the practical method of crediting/charging interest is used.

Accepted Answer

A) $13,988.01 
B) $13,984.33 
C) $13,980.62 
D) $13,762.40 
A) $13,988.01 
B) $13,984.33 
C) $13,980.62 
D) $13,762.40

Question 16

What simple interest rate r is equivalent to j12 = 9% if money is invested for 3.5 years?

Accepted Answer

A) 8.96% 
B) 9.83% 
C) 10.53% 
D) 11.27% 
A) 8.96% 
B) 9.83% 
C) 10.53% 
D) 11.27%

Question 17

An investment has the following interest rates: j4 = 8% for the first 2-years,followed by j2 = 8% for the next 4-years,followed by j12 = 6% for the last 28-months.What is the equivalent nominal rate of interest,compounded 3 times a year,j3,earned over this time period of 100 months?

Accepted Answer

A) 9.99% 
B) 7.43% 
C) 5.56% 
D) 11.31% 
A) 9.99% 
B) 7.43% 
C) 5.56% 
D) 11.31%

Question 18

The amount of clover on a lawn grows exponentially at a rate of j24(compounded twice a month)such that it doubles every 6-months.If there are 5000 pieces of clover in your lawn today,how many did you have 4-months ago? (Answer to the nearest piece of clover)

Accepted Answer

A) 1984 
B) 3150 
C) 3333 
D) 3969 
A) 1984 
B) 3150 
C) 3333 
D) 3969

Question 19

Jackie invested $500 in an investment fund that pays interest at j2 = 5.3% for the first two years,j12 = 7% for the next three years,and j365 = 4.5% for the last year.What effective interest rate,j,did she earn over the 6 years?

Accepted Answer

A) 6.17% 
B) 7.23% 
C) 6.78% 
D) 6.01% 
A) 6.17% 
B) 7.23% 
C) 6.78% 
D) 6.01%

Question 20

$P is deposited today in a fund which earns j12 = 6% for the 1st year,j4 = 6% for the 2nd year and j2 = 6% thereafter.At the end of 4 years,there is $12,000 in the fund.What is P?

Accepted Answer

A) $9461.84 
B) $9505.12 
C) $9747.82 
D) $10,038.06 
A) $9461.84 
B) $9505.12 
C) $9747.82 
D) $10,038.06

$4000 is deposited into an account earning j₂ = 8% for the first 2 years and j₂ = 10% thereafter.How long will it take for it to grow to $9041.67?

An investment has the following interest rates: j₂ = 6% for the first 30 months,followed by j₄ = 8% for the next 36 months,followed by j₆ = 9% for the last 18 months.What is the equivalent j₂ earned over the 7 year period?

You are investing a sum of money.Rank the following interest in order of which one will give you the most interest. a. j₂ = 8% b. j₅₂ = 7.9% c. δ = j_∞ = 7.85%

What simple interest rate,r,is equivalent to j₁₂ = 9% over a 2-year period?

What is the value,in 18 months,of an investment of $10,000 made today if interest is compounded continuously at 6.5%?

You deposit $10,000 today in a fund earning interest at j_× = 8%.How much will you have accumulated at the end of 21 months?

A single deposit of $25,000 is made into an account that earns interest at j₄ = 7% for one year,j₂ = 6% for the next year and j₆ = 3% thereafter.How much interest is earned in the fourth year?

The 1996 Canada Savings Bond issue offered the following annual rates,guaranteed over 10 years: 3% in the first year,followed by 4%,5%,6%,6.50%,6.75%,7%,7,25%,8% and 8.75% in the 10^th year.If you buy one of these bonds today and cash it in after 5 years,what annual rate of return do you earn?

A long-term promissory note for $40,000 is taken out on June 15,2010.The interest rate on the note is j₄ = 7% and the note is due on December 15,2015.What is the maturity value of the note?

An individual borrowed $10 000 nine months ago and another $6000 three months ago and he wishes to pay off this loan with a payment of $X today.You are given that j₂ = 10% and that the practical method of crediting/charging interest is used.Determine $X.

You invest a sum of money at j₁₂ = 15% for 3 years,followed by j₄ = 12% for 4 years.What equivalent rate of return,j₁,do you earn over each of the 7 years?

Payments of $1000 due in 6 months,$1500 due in 9 months,and $1200 due in 15 months are to be exchanged for a single payment $X due in 12 months.What is X if j₄= 6%?

You shop around for the best interest rate and have narrowed your choices to the following: Bank I: j₁ = 12% Bank II: j₄ = 11.55% Bank III: j₁₂ = 11.30% You wish to have $S in 3 years.What is the present value of S? Put the banks in order,from lowest to highest present value of S.

You borrow $2000 today.This loan is due in 3-years with interest at j₁ = 9%.It is agreed that you will instead pay $1000 one-year from now and $X two-years from now.If money is worth j₂ = 6%,what is the value of X?

A loan of $A is taken out today.You are given that this loan is to be paid off with a payment of $20,000 in 3 years and 8 months.Determine A,if j₂ = 10% and the practical method of crediting/charging interest is used.

What simple interest rate r is equivalent to j₁₂ = 9% if money is invested for 3.5 years?

An investment has the following interest rates: j₄ = 8% for the first 2-years,followed by j₂ = 8% for the next 4-years,followed by j₁₂ = 6% for the last 28-months.What is the equivalent nominal rate of interest,compounded 3 times a year,j₃,earned over this time period of 100 months?

The amount of clover on a lawn grows exponentially at a rate of j₂₄(compounded twice a month)such that it doubles every 6-months.If there are 5000 pieces of clover in your lawn today,how many did you have 4-months ago? (Answer to the nearest piece of clover)

Jackie invested $500 in an investment fund that pays interest at j₂ = 5.3% for the first two years,j₁₂ = 7% for the next three years,and j₃₆₅ = 4.5% for the last year.What effective interest rate,j,did she earn over the 6 years?

$P is deposited today in a fund which earns j₁₂ = 6% for the 1^st year,j₄ = 6% for the 2^nd year and j₂ = 6% thereafter.At the end of 4 years,there is $12,000 in the fund.What is P?

Simple Interest and Simple Discount

Simple Annuities

General and Other Annuities

Repayment of Debts

Bonds

Business Decisions, Capital Budgeting and Depreciation

Contingent Payments

Filters

Exam 2: Compound Interest

$4000 is deposited into an account earning j2 = 8% for the first 2 years and j2 = 10% thereafter.How long will it take for it to grow to $9041.67?

An investment has the following interest rates: j2 = 6% for the first 30 months,followed by j4 = 8% for the next 36 months,followed by j6 = 9% for the last 18 months.What is the equivalent j2 earned over the 7 year period?

You are investing a sum of money.Rank the following interest in order of which one will give you the most interest. a. j2 = 8% b. j52 = 7.9% c. δ = j∞ = 7.85%

What simple interest rate,r,is equivalent to j12 = 9% over a 2-year period?

What is the value,in 18 months,of an investment of $10,000 made today if interest is compounded continuously at 6.5%?

You deposit $10,000 today in a fund earning interest at j× = 8%.How much will you have accumulated at the end of 21 months?

A single deposit of $25,000 is made into an account that earns interest at j4 = 7% for one year,j2 = 6% for the next year and j6 = 3% thereafter.How much interest is earned in the fourth year?

The 1996 Canada Savings Bond issue offered the following annual rates,guaranteed over 10 years: 3% in the first year,followed by 4%,5%,6%,6.50%,6.75%,7%,7,25%,8% and 8.75% in the 10th year.If you buy one of these bonds today and cash it in after 5 years,what annual rate of return do you earn?

A long-term promissory note for $40,000 is taken out on June 15,2010.The interest rate on the note is j4 = 7% and the note is due on December 15,2015.What is the maturity value of the note?

An individual borrowed $10 000 nine months ago and another $6000 three months ago and he wishes to pay off this loan with a payment of $X today.You are given that j2 = 10% and that the practical method of crediting/charging interest is used.Determine $X.

You invest a sum of money at j12 = 15% for 3 years,followed by j4 = 12% for 4 years.What equivalent rate of return,j1,do you earn over each of the 7 years?

Payments of $1000 due in 6 months,$1500 due in 9 months,and $1200 due in 15 months are to be exchanged for a single payment $X due in 12 months.What is X if j4 = 6%?

You shop around for the best interest rate and have narrowed your choices to the following: Bank I: j1 = 12% Bank II: j4 = 11.55% Bank III: j12 = 11.30% You wish to have $S in 3 years.What is the present value of S? Put the banks in order,from lowest to highest present value of S.

You borrow $2000 today.This loan is due in 3-years with interest at j1 = 9%.It is agreed that you will instead pay $1000 one-year from now and $X two-years from now.If money is worth j2 = 6%,what is the value of X?

A loan of $A is taken out today.You are given that this loan is to be paid off with a payment of $20,000 in 3 years and 8 months.Determine A,if j2 = 10% and the practical method of crediting/charging interest is used.

What simple interest rate r is equivalent to j12 = 9% if money is invested for 3.5 years?

An investment has the following interest rates: j4 = 8% for the first 2-years,followed by j2 = 8% for the next 4-years,followed by j12 = 6% for the last 28-months.What is the equivalent nominal rate of interest,compounded 3 times a year,j3,earned over this time period of 100 months?

The amount of clover on a lawn grows exponentially at a rate of j24(compounded twice a month)such that it doubles every 6-months.If there are 5000 pieces of clover in your lawn today,how many did you have 4-months ago? (Answer to the nearest piece of clover)

Jackie invested $500 in an investment fund that pays interest at j2 = 5.3% for the first two years,j12 = 7% for the next three years,and j365 = 4.5% for the last year.What effective interest rate,j,did she earn over the 6 years?

$P is deposited today in a fund which earns j12 = 6% for the 1st year,j4 = 6% for the 2nd year and j2 = 6% thereafter.At the end of 4 years,there is $12,000 in the fund.What is P?

Simple Interest and Simple Discount

Simple Annuities

General and Other Annuities

Repayment of Debts

Bonds

Business Decisions, Capital Budgeting and Depreciation

Contingent Payments

Filters

$4000 is deposited into an account earning j₂ = 8% for the first 2 years and j₂ = 10% thereafter.How long will it take for it to grow to $9041.67?

An investment has the following interest rates: j₂ = 6% for the first 30 months,followed by j₄ = 8% for the next 36 months,followed by j₆ = 9% for the last 18 months.What is the equivalent j₂ earned over the 7 year period?

You are investing a sum of money.Rank the following interest in order of which one will give you the most interest. a. j₂ = 8% b. j₅₂ = 7.9% c. δ = j_∞ = 7.85%

What simple interest rate,r,is equivalent to j₁₂ = 9% over a 2-year period?

You deposit $10,000 today in a fund earning interest at j_× = 8%.How much will you have accumulated at the end of 21 months?

A single deposit of $25,000 is made into an account that earns interest at j₄ = 7% for one year,j₂ = 6% for the next year and j₆ = 3% thereafter.How much interest is earned in the fourth year?

The 1996 Canada Savings Bond issue offered the following annual rates,guaranteed over 10 years: 3% in the first year,followed by 4%,5%,6%,6.50%,6.75%,7%,7,25%,8% and 8.75% in the 10^th year.If you buy one of these bonds today and cash it in after 5 years,what annual rate of return do you earn?

A long-term promissory note for $40,000 is taken out on June 15,2010.The interest rate on the note is j₄ = 7% and the note is due on December 15,2015.What is the maturity value of the note?

An individual borrowed $10 000 nine months ago and another $6000 three months ago and he wishes to pay off this loan with a payment of $X today.You are given that j₂ = 10% and that the practical method of crediting/charging interest is used.Determine $X.

You invest a sum of money at j₁₂ = 15% for 3 years,followed by j₄ = 12% for 4 years.What equivalent rate of return,j₁,do you earn over each of the 7 years?

Payments of $1000 due in 6 months,$1500 due in 9 months,and $1200 due in 15 months are to be exchanged for a single payment $X due in 12 months.What is X if j₄= 6%?

You shop around for the best interest rate and have narrowed your choices to the following: Bank I: j₁ = 12% Bank II: j₄ = 11.55% Bank III: j₁₂ = 11.30% You wish to have $S in 3 years.What is the present value of S? Put the banks in order,from lowest to highest present value of S.

You borrow $2000 today.This loan is due in 3-years with interest at j₁ = 9%.It is agreed that you will instead pay $1000 one-year from now and $X two-years from now.If money is worth j₂ = 6%,what is the value of X?

A loan of $A is taken out today.You are given that this loan is to be paid off with a payment of $20,000 in 3 years and 8 months.Determine A,if j₂ = 10% and the practical method of crediting/charging interest is used.

What simple interest rate r is equivalent to j₁₂ = 9% if money is invested for 3.5 years?

An investment has the following interest rates: j₄ = 8% for the first 2-years,followed by j₂ = 8% for the next 4-years,followed by j₁₂ = 6% for the last 28-months.What is the equivalent nominal rate of interest,compounded 3 times a year,j₃,earned over this time period of 100 months?

The amount of clover on a lawn grows exponentially at a rate of j₂₄(compounded twice a month)such that it doubles every 6-months.If there are 5000 pieces of clover in your lawn today,how many did you have 4-months ago? (Answer to the nearest piece of clover)

Jackie invested $500 in an investment fund that pays interest at j₂ = 5.3% for the first two years,j₁₂ = 7% for the next three years,and j₃₆₅ = 4.5% for the last year.What effective interest rate,j,did she earn over the 6 years?

$P is deposited today in a fund which earns j₁₂ = 6% for the 1^st year,j₄ = 6% for the 2^nd year and j₂ = 6% thereafter.At the end of 4 years,there is $12,000 in the fund.What is P?