Question 1

Suman deposited $95 000.00 in an RRSP on April 1, 2016, at 8.22% compounded quarterly. Subsequently the interest rate was changed to 8.5% compounded monthly on September 1, 2016, and to 8.8% compounded semi-annually on June 1, 2017. What was the value of the RRSP deposit on December 1, 2017, if no further changes in interest were made?

Accepted Answer

A) $97446.55 
B) $103837.72 
C) $108406.58 
D) $101734.20 
E) $112975.44

Question 2

Nader makes semi-annual payments of $3000 to pay off his loan. Because of unemployment, he defaulted on his last two payments. What total payment is he expected to make during his third payment, if the defaulted payments are compounded monthly at a rate of 6%?

Accepted Answer

The answer of Nader makes semi-annual payments of $3000 to...

Question 3

A note dated July 1, 2000, promises to pay $9000 with interest at 12.4% compounded quarterly on January 1, 2007. Find the proceeds from the sale of the note on July 1, 2002, if money is then worth 8.64% compounded semi-annually.

Accepted Answer

The answer of A note dated July 1, 2000, promises...

Question 4

Find the proceeds of a non-interest-bearing promissory note for $175 500 discounted 54 months before maturity at 9.75% compounded semi-annually.

Accepted Answer

The answer of Find the proceeds of a non-interest-bearing promissory...

Question 5

A court ruled in favour of Professor Dumbledore. Professor Dumbledore successfully claimed that that Professor Umbridge defaulted on two payments of 1000 galleons each. One payment was due 18 months ago and the other 11 months ago. What is the appropriate amount for the court to order Umbridge to pay immediately if the court uses 6% compounded monthly for the interest rate money can earn?

Accepted Answer

The answer of A court ruled in favour of Professor...

Question 6

Find the present value and the compound discount of $7500 due in five years and six months if interest is 4.8% compounded quarterly.

Accepted Answer

The answer of Find the present value and the compound...

Question 7

Calculate the present value of $12 500.00 due in two years and nine months if interest is 7.8% p.a. compounded semi-annually.

Accepted Answer

The answer of Calculate the present value of $12 500.00...

Question 8

A twenty-year note for $10 000.00 bearing interest at 12% compounded monthly is discounted at 8% compounded quarterly four years and six months before maturity. Find the proceeds of the note.

Accepted Answer

The answer of A twenty-year note for $10 000.00 bearing...

Question 9

A debt can be repaid by payments of $4125.00 today, $3770.00 in two years and $5600.00 in five years. What single payment would settle the debt three years from now if money is worth 9.88% p.a. compounded quarterly?

Accepted Answer

The answer of A debt can be repaid by payments...

Question 10

Find the present value and the compound discount of $6100.00 due in 7.5 years if interest is 8.26% compounded semi-annually.

Accepted Answer

The answer of Find the present value and the compound...

Question 11

Determine the maturity value of $5400 due in 91 months compounding annually at 8.75%.

Accepted Answer

The answer of Determine the maturity value of $5400 due...

Question 12

Six years after Ellen deposited $4500 in a savings account that earned interest at 4.68% compounded monthly, the rate of interest was changed to 6.4% compounded semi-annually. How much was in the account thirteen years after the deposit was made?

Accepted Answer

The answer of Six years after Ellen deposited $4500 in...

Question 13

A ten-year note for $2220.00 bearing interest at 6.6% compounded monthly is discounted at 8.92% compounded quarterly four years and four months before maturity. Find the proceeds of the note.

Accepted Answer

The answer of A ten-year note for $2220.00 bearing interest...

Question 14

Betty deposited $17 150.00 in an RRSP on March 1, 2010, at 6.4% compounded quarterly. Subsequently the interest rate was changed to 6.6% compounded monthly on September 1, 2012, and to 6.8% compounded semi-annually on June 1, 2014. What was the value of the RRSP deposit on December 1, 2016, if no further changes in interest were made?

Accepted Answer

The answer of Betty deposited $17 150.00 in an RRSP...

Question 15

Three debt payments, the first in the amount of $1600.00 due today, the second in the amount of $7200.00 due in 15 months and the third in the amount of $5000 due in 24 months, are to be settled by two equal payments nine months from now and a final payment in 21 months. Determine the size of the equal payments if the money is worth 12.12% p.a. compounded monthly.

Accepted Answer

A) $6900.00 
B) $6415.26 
C) $6801.60 
D) $12 830.51 
E) $13 800.00

Question 16

Determine the maturity value of $2000 due in 63 months compounding annually at 10%.

Accepted Answer

The answer of Determine the maturity value of $2000 due...

Question 17

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?

Accepted Answer

A) $12 440.86 
B) $12 040.86 
C) $12 404.86 
D) $12 444.86 
E) $12 884.86

Question 18

You borrow $4750 at a rate of 6.72% compounded monthly. You make a partial payment of $1400 in 3 months. You also agree to make two equal payments 3 and 5 months after the partial payment. What is the size of the equal payments? Use a focal date of 8 months.

Accepted Answer

A) $1573.84 
B) $1754.02 
C) $1735.84 
D) $1784.35 
E) $1788.02

Question 19

Karen started a registered retirement savings plan on February 1, 2000, with a deposit of $2210. She added $2000 on February 1, 2001, and $1475 on February 1, 2004. What is the accumulated value of her RRSP account on August 1, 2005, if interest is 10.44% compounded quarterly?

Accepted Answer

The answer of Karen started a registered retirement savings plan...

Question 20

You invest $8000 in a floating rate guaranteed investment certificate. For the first 24 months you earn 6% compounded semi-annually. For the next 6 months you earn 12% compounded monthly. What is the maturity value of the certificate?

Accepted Answer

A) $9558.02 
B) $9888.00 
C) $9558.00 
D) $9585.00 
E) $8558.00

Exam 9: Compound Interest - Future Value and Present Value