Question 1

If $1400.00 accumulates to $2350.00 in five years,six months compounded semi-annually,what is the effective rate of interest?

Accepted Answer

PV = 1400,FV = 2350 n = 5 × 2 + = 11 i = - 1 = - 1 = 1.0482118 - 1 = 0.0482118 f = (1+ .0482118)²- 1 = 1.098748 - 1 = 0.098748 × 100% = 9.87%

Question 2

Janice owes two debt payments-a payment of $6700 due in twelve months and a payment of $8750 due in twenty-one months.If Janice makes a payment of $7000 now,when should she make a second payment of $7900 if money is worth 11.5% compounded semi-annually?

Accepted Answer

Let the focal date be now. Today's balance 6700.00(1.0575)^-2 + 8750.00(1.0575)^-3.5 - 7000.00 6700.00(.8942094)+ 8750.00(.822278)- 7000.00 5991.20 + 7194.93 - 7000.00 PV = 6186.13 owing today ,FV = 7900 n = = = = 4.37423 The payment of $7900.00 should be made in 4.37423 × 6 = 26.245 months (2.19 years)from now.

Question 3

What is the nominal rate of interest at which money will triple itself in eight years and six months if compounded semi-annually?

Accepted Answer

PV = 1,FV = 3 n = 8 × 2 +   = 17 i =   - 1 =   - 1 = 1.0667581 - 1 = 0.0667581 The nominal annual rate is 0.066758117 × 2 × 100% = 13.351623%

Question 4

Calculate the nominal rate of interest compounded semi-annually that will double money in eight years.

Accepted Answer

PV = 1; FV = 2; n = 8(2)= 16;

Question 5

What is the nominal rate of interest compounded semi-annually that is equivalent to an effective rate of 8.25%

Accepted Answer

i = (1+ 0.0825)^0.5 - 1 = 1.040432

Question 6

Calculate the effective rate of interest,if $10 000 grew to $15 000 in 4 years with quarterly compounding.

Accepted Answer

A) 12.28% 
B) 10.67% 
C) 4.06% 
D) 8.45% 
E) 0.85% 
A) 12.28% 
B) 10.67% 
C) 4.06% 
D) 8.45% 
E) 0.85%

Question 7

According to the World Bank,the population in Georgia is decreasing by 0.83% per year.According to the 2011 consensus,the population of Georgia is 4.5 million.Assuming the population growth rate remains the same; calculate the year in which the population of Georgia will be half the population in 2011?

Accepted Answer

FV = @#IMG-DLM& PV i = -0.83% PV = FV @#IMG-DLM& ⇒

Question 8

Calculate the number of years for money to triple at 3.6% p.a.compounded monthly.

Accepted Answer

PV = 1; FV = 3; i =

Question 9

How long will it take Whitby's population to grow from 125 000 (in 2013)to 200 000,if the annual growth rate is 3%? Round your answer to the nearest month.

Accepted Answer

PV = 125 000 FV = 200 000 i =

Question 10

A five-year,$4500.00 promissory note with interest at 7.5% compounded semi-annually was discounted at 8% compounded quarterly yielding proceeds of $6150.00.How many months before the due date was the discount date?

Accepted Answer

PV = 4500,i = 0.075 ÷ 2 = 0.03

Question 11

In how many years will money triple at 12% compounded semi-annually?

Accepted Answer

PV = 1,FV = 3,i = 0.

Question 12

A principal of $5000.00 compounded monthly amounts to $6000.00 in 7 years.What is the nominal annual rate of interest?

Accepted Answer

PV = 5000.00; FV = 6000.00; n

Question 13

A promissory note for $3600.00 dated May 15,2012,requires an interest payment of $370.00 at maturity.If interest is at 9.6% compounded monthly,determine the due date of the note.

Accepted Answer

PV = 3600,FV = 3600 + 370 = 3970,i = 0.0

Question 14

The accountant of Crystal Credit Union proposes changing the method of compounding interest on premium savings accounts to yearly compounding.If the current rate is 8% compounded quarterly,what nominal rate should the treasurer suggest to the Board of Directors to maintain the same effective rate of interest?

Accepted Answer

Invest $1

Question 15

A principal of $4250.00 compounded monthly amounts to $4800.00 in 6.25 years.What is the nominal annual rate of interest?

Accepted Answer

PV = 4250.00; FV = 4800.00; n

Question 16

At what nominal rate of interest compounded semi-annually will $5900 earn $6400 interest in six years?

Accepted Answer

PV = 5900,FV = 5900

Question 17

At what nominal rate of interest compounded semi-annually will $11 800 earn $6 800 interest in six years?

Accepted Answer

PV = 11 800; FV = 11 800 + 680

Question 18

The Brick store credit card quotes a rate of 1.75% per month on the unpaid balance.Calculate the effective rate of interest being charged.

Accepted Answer

A) 21% 
B) 9.85% 
C) 10.97% 
D) 51.64% 
E) 23.14% 
A) 21% 
B) 9.85% 
C) 10.97% 
D) 51.64% 
E) 23.14%

Question 19

In how many days will $770.00 grow to $880.00 at 11.5% p.a.compounded monthly?

Accepted Answer

PV = 770,FV = 880,i = 0.115 ÷

Question 20

What nominal rate of interest-compounded quarterly will have to be earned on a savings account for it to grow from $1525 to $1955 over a period of 21 months?

Accepted Answer

A) 14.45% 
B) 15.45% 
C) 12.45% 
D) 3.61% 
E) 10.45% 
A) 14.45% 
B) 15.45% 
C) 12.45% 
D) 3.61% 
E) 10.45%

If $1400.00 accumulates to $2350.00 in five years,six months compounded semi-annually,what is the effective rate of interest?

Janice owes two debt payments-a payment of $6700 due in twelve months and a payment of $8750 due in twenty-one months.If Janice makes a payment of $7000 now,when should she make a second payment of $7900 if money is worth 11.5% compounded semi-annually?

What is the nominal rate of interest at which money will triple itself in eight years and six months if compounded semi-annually?

Calculate the nominal rate of interest compounded semi-annually that will double money in eight years.

What is the nominal rate of interest compounded semi-annually that is equivalent to an effective rate of 8.25%

Calculate the effective rate of interest,if $10 000 grew to $15 000 in 4 years with quarterly compounding.

Calculate the number of years for money to triple at 3.6% p.a.compounded monthly.

How long will it take Whitby's population to grow from 125 000 (in 2013)to 200 000,if the annual growth rate is 3%? Round your answer to the nearest month.

A five-year,$4500.00 promissory note with interest at 7.5% compounded semi-annually was discounted at 8% compounded quarterly yielding proceeds of $6150.00.How many months before the due date was the discount date?

In how many years will money triple at 12% compounded semi-annually?

A principal of $5000.00 compounded monthly amounts to $6000.00 in 7 years.What is the nominal annual rate of interest?

A promissory note for $3600.00 dated May 15,2012,requires an interest payment of $370.00 at maturity.If interest is at 9.6% compounded monthly,determine the due date of the note.

A principal of $4250.00 compounded monthly amounts to $4800.00 in 6.25 years.What is the nominal annual rate of interest?

At what nominal rate of interest compounded semi-annually will $5900 earn $6400 interest in six years?

At what nominal rate of interest compounded semi-annually will $11 800 earn $6 800 interest in six years?

The Brick store credit card quotes a rate of 1.75% per month on the unpaid balance.Calculate the effective rate of interest being charged.

In how many days will $770.00 grow to $880.00 at 11.5% p.a.compounded monthly?

What nominal rate of interest-compounded quarterly will have to be earned on a savings account for it to grow from $1525 to $1955 over a period of 21 months?

Review of Arithmetic

Review of Basic Algebra

Ratio,proportion,and Percent

Linear Systems

Cost-Volume-Profit Analysis and Break-Even

Trade Discounts, cash Discounts, markup, and Markdown

Simple Interest

Simple Interest Applications

Compound Interestfuture Value and Present Value

Ordinary Simple Annuities

Ordinary General Annuities

Annuities Due, deferred Annuities, and Perpetuities

Amortization of Loans,including Residential Mortgages

Bond Valuation and Sinking Funds

Investment Decision Applications

Filters

Exam 10: Compound Interestfurther Topics

If $1400.00 accumulates to $2350.00 in five years,six months compounded semi-annually,what is the effective rate of interest?

Janice owes two debt payments-a payment of $6700 due in twelve months and a payment of $8750 due in twenty-one months.If Janice makes a payment of $7000 now,when should she make a second payment of $7900 if money is worth 11.5% compounded semi-annually?

What is the nominal rate of interest at which money will triple itself in eight years and six months if compounded semi-annually?

Calculate the nominal rate of interest compounded semi-annually that will double money in eight years.

What is the nominal rate of interest compounded semi-annually that is equivalent to an effective rate of 8.25%

Calculate the effective rate of interest,if $10 000 grew to $15 000 in 4 years with quarterly compounding.

Calculate the number of years for money to triple at 3.6% p.a.compounded monthly.

How long will it take Whitby's population to grow from 125 000 (in 2013)to 200 000,if the annual growth rate is 3%? Round your answer to the nearest month.

A five-year,$4500.00 promissory note with interest at 7.5% compounded semi-annually was discounted at 8% compounded quarterly yielding proceeds of $6150.00.How many months before the due date was the discount date?

In how many years will money triple at 12% compounded semi-annually?

A principal of $5000.00 compounded monthly amounts to $6000.00 in 7 years.What is the nominal annual rate of interest?

A promissory note for $3600.00 dated May 15,2012,requires an interest payment of $370.00 at maturity.If interest is at 9.6% compounded monthly,determine the due date of the note.

A principal of $4250.00 compounded monthly amounts to $4800.00 in 6.25 years.What is the nominal annual rate of interest?

At what nominal rate of interest compounded semi-annually will $5900 earn $6400 interest in six years?

At what nominal rate of interest compounded semi-annually will $11 800 earn $6 800 interest in six years?

The Brick store credit card quotes a rate of 1.75% per month on the unpaid balance.Calculate the effective rate of interest being charged.

In how many days will $770.00 grow to $880.00 at 11.5% p.a.compounded monthly?

What nominal rate of interest-compounded quarterly will have to be earned on a savings account for it to grow from $1525 to $1955 over a period of 21 months?

Review of Arithmetic

Review of Basic Algebra

Ratio,proportion,and Percent

Linear Systems

Cost-Volume-Profit Analysis and Break-Even

Trade Discounts, cash Discounts, markup, and Markdown

Simple Interest

Simple Interest Applications

Compound Interestfuture Value and Present Value

Ordinary Simple Annuities

Ordinary General Annuities

Annuities Due, deferred Annuities, and Perpetuities

Amortization of Loans,including Residential Mortgages

Bond Valuation and Sinking Funds

Investment Decision Applications

Filters