Question 1

A woman plans to withdraw $1800 18-months from now and $2400 36-months from now.How much does she need to deposit today if the interest rate is j12 = 12% for the first 2 years and j12 = 6% thereafter?

Accepted Answer

A)  $3182.25
B)  $3285.18
C)  $3510.38
D)  $3765.40 B

Question 2

If money triples in value in 8 years,what nominal rate of interest compounded semi-annually is being earned?

Accepted Answer

A)  7.11%
B)  7.36%
C)  14.22%
D)  14.72% C

Question 3

You deposit $1000 today in an account that pays interest at j2 = 8% for the next 5-years and j2 = 6% thereafter.How long in total (in years and days)will it take for you to at least double your original investment?

Accepted Answer

A)  10 years,34 days
B)  10 years,67 days
C)  10 years,79 days
D)  10 years,158 days A

Question 4

In 1977,the annual inflation rate in Canada was 9.5%,while one-year interest rates were 7.9%.What was the real rate of return in Canada in 1977?

Accepted Answer

A)  -1.60%
B)  -1.46%
C)  1.46%
D)  1.60%

Question 5

What is the effective annual rate,j,over 7 years that is equivalent to j6 = 6% for the first two years,j12 = 9% for the next three years,and j2 = 4% for the last two years?

Accepted Answer

A)  6.00%
B)  6.31%
C)  6.69%
D)  6.91%

Question 6

How long will it take for $750 to accumulate to $1000 if j2 = 9%?

Accepted Answer

A)  6 years,175 days
B)  6 years,196 days
C)  3 years,88 days
D)  3 years,98 days

Question 7

Population growth in a given urban city was 4% for the calendar years 2003 to 2007 inclusive and 3% for the calendar years 2008 to 2010 inclusive.If the population of this city was 664,735 on December 31,2010,what was the population of this city on December 31,2002?

Accepted Answer

A)  500,000
B)  512,193
C)  515,000
D)  520,000

Question 8

What is the accumulated value of $15,000 over 6 years and 5 months if j4 = 10% and the exact method of accumulating is used? (Answer to the nearest dollar)

Accepted Answer

A)  $27,411
B)  $27,981
C)  $28,039
D)  $28,271

Question 9

Jack invested $1200 into an account for 5-years.The account paid interest at j1 = 4% for the first 2-years and j1 = 6% thereafter.If the annual inflation rate is 2% for each of these 5-years,what is the annual real rate of interest earned over the 5-years?

Accepted Answer

A)  3.92%
B)  3.13%
C)  2.94%
D)  1.96%

Question 10

Mr.Harry Leggs borrows $5000 today,due with interest at j4 = 8% in one lump sum at the end of 2 years.Instead,Mr.Leggs wishes to pay $2000 six months from today and $X in 18 months.If money is worth j12 = 6%,what is X?

Accepted Answer

A)  $3252.09
B)  $3346.29
C)  $3465.95
D)  $3562.23

Question 11

Mrs.Singh owes Mr.Valdy $55,513.78 in 14-months.Mr.Valdy agrees to let her repay the loan with a payment of $35,000 in 6-months,$10,000 in 8-months and $X in 14-months.If money is worth j4 = 6%,what is the value of X,using 14-months as the focal date along with the exact method of crediting/charging interest?

Accepted Answer

A)  $8793.97
B)  $9204.40
C)  $9230.06
D)  $9794.03

Question 12

You invest some money and earn the following rates of interest: simple interest of 15% for 9 months,followed by j6 = 12% for 18 months,followed by j4 = 5% for 9 months.What is the equivalent rate of interest,j2 earned over the 36 months?

Accepted Answer

A)  10.97%
B)  11.03%
C)  11.06%
D)  11.23%

Question 13

You wish to have $10,000 45 months from now.To accomplish this goal,you deposit $P in an account today paying interest continuously atj× = 8%.What is P?

Accepted Answer

A)  $9,231.16
B)  $7408.18
C)  $7415.56
D)  $7493.09

Question 14

If money triples in 6 years,what rate of interest,j2,is being earned?

Accepted Answer

A)  9.6%
B)  10.0%
C)  19.2%
D)  20.1%

Question 15

A long term promissory notes for $20 000 is signed on April 15,2010.It is due on October 15,2013 at j2 = 6%.The maturity value of the note is $24 597.48.The note is sold on April 15,2011 to a bank that discounts the note at j4 = 8%.What are the proceeds?

Accepted Answer

A)  $21,218.00
B)  $20,582.07
C)  $20,292.30
D)  $20,178.50

Question 16

During the spring growing season,a sunflower plant will increase its size by 60% every 7 days.If a plant is currently 5 cm tall,how tall will/should it be in 25 days?

Accepted Answer

A)  26.8 cm
B)  31.0 cm
C)  39.1 cm
D)  42.1 cm

Question 17

What simple interest rate,r,is equivalent to j4 = 14% over 18 months?

Accepted Answer

A)  14.48%
B)  14.75%
C)  15.28%
D)  16.74%

Question 18

The maturity value of a promissory note due on Sept.14,2010 is $6200.What are the proceeds of the note using the practical (approximate)method on Jun.2,2007 if j2 = 10%?

Accepted Answer

A)  $4454.51
B)  $4498.36
C)  $4502.80
D)  $4760.25

Question 19

A person invests in a fund earning interest at j2 = 6%.The annual rate of inflation is 2% in year 1,2.5% in year 2,and 3.0% in year 3.What is the annual real interest rate,compounded once a year,earned over the 3-year period?

Accepted Answer

A)  3.42%
B)  3.47%
C)  3.50%
D)  3.59%

Question 20

A $1000 loan is taken out today.The loan is repaid with a payment of $400 at the end of the 1st year,$800 at the end of the 5th year,and a payment of $X at the end of the 10th year.If j4 = 12%,what is X?

Accepted Answer

A)  $220.97
B)  $657.84
C)  $737.26
D)  $1406.54

Exam 2: Compound Interest

A woman plans to withdraw $1800 18-months from now and $2400 36-months from now.How much does she need to deposit today if the interest rate is j₁₂ = 12% for the first 2 years and j₁₂ = 6% thereafter?

If money triples in value in 8 years,what nominal rate of interest compounded semi-annually is being earned?

You deposit $1000 today in an account that pays interest at j₂ = 8% for the next 5-years and j₂ = 6% thereafter.How long in total (in years and days) will it take for you to at least double your original investment?

In 1977,the annual inflation rate in Canada was 9.5%,while one-year interest rates were 7.9%.What was the real rate of return in Canada in 1977?

What is the effective annual rate,j,over 7 years that is equivalent to j₆ = 6% for the first two years,j₁₂ = 9% for the next three years,and j₂ = 4% for the last two years?

How long will it take for $750 to accumulate to $1000 if j₂ = 9%?

Population growth in a given urban city was 4% for the calendar years 2003 to 2007 inclusive and 3% for the calendar years 2008 to 2010 inclusive.If the population of this city was 664,735 on December 31,2010,what was the population of this city on December 31,2002?

What is the accumulated value of $15,000 over 6 years and 5 months if j₄ = 10% and the exact method of accumulating is used? (Answer to the nearest dollar)

Jack invested $1200 into an account for 5-years.The account paid interest at j₁ = 4% for the first 2-years and j₁ = 6% thereafter.If the annual inflation rate is 2% for each of these 5-years,what is the annual real rate of interest earned over the 5-years?

Mr.Harry Leggs borrows $5000 today,due with interest at j₄ = 8% in one lump sum at the end of 2 years.Instead,Mr.Leggs wishes to pay $2000 six months from today and $X in 18 months.If money is worth j₁₂ = 6%,what is X?

You invest some money and earn the following rates of interest: simple interest of 15% for 9 months,followed by j₆ = 12% for 18 months,followed by j₄ = 5% for 9 months.What is the equivalent rate of interest,j₂ earned over the 36 months?

You wish to have $10,000 45 months from now.To accomplish this goal,you deposit $P in an account today paying interest continuously atj_× = 8%.What is P?

If money triples in 6 years,what rate of interest,j₂,is being earned?

A long term promissory notes for $20 000 is signed on April 15,2010.It is due on October 15,2013 at j₂ = 6%.The maturity value of the note is $24 597.48.The note is sold on April 15,2011 to a bank that discounts the note at j₄ = 8%.What are the proceeds?

During the spring growing season,a sunflower plant will increase its size by 60% every 7 days.If a plant is currently 5 cm tall,how tall will/should it be in 25 days?

What simple interest rate,r,is equivalent to j₄ = 14% over 18 months?

The maturity value of a promissory note due on Sept.14,2010 is $6200.What are the proceeds of the note using the practical (approximate) method on Jun.2,2007 if j₂ = 10%?

A person invests in a fund earning interest at j₂ = 6%.The annual rate of inflation is 2% in year 1,2.5% in year 2,and 3.0% in year 3.What is the annual real interest rate,compounded once a year,earned over the 3-year period?

A $1000 loan is taken out today.The loan is repaid with a payment of $400 at the end of the 1^st year,$800 at the end of the 5^th year,and a payment of $X at the end of the 10^th year.If j₄ = 12%,what is X?

Exam 2: Compound Interest

A woman plans to withdraw $1800 18-months from now and $2400 36-months from now.How much does she need to deposit today if the interest rate is j12 = 12% for the first 2 years and j12 = 6% thereafter?

If money triples in value in 8 years,what nominal rate of interest compounded semi-annually is being earned?

You deposit $1000 today in an account that pays interest at j2 = 8% for the next 5-years and j2 = 6% thereafter.How long in total (in years and days) will it take for you to at least double your original investment?

In 1977,the annual inflation rate in Canada was 9.5%,while one-year interest rates were 7.9%.What was the real rate of return in Canada in 1977?

What is the effective annual rate,j,over 7 years that is equivalent to j6 = 6% for the first two years,j12 = 9% for the next three years,and j2 = 4% for the last two years?

How long will it take for $750 to accumulate to $1000 if j2 = 9%?

Population growth in a given urban city was 4% for the calendar years 2003 to 2007 inclusive and 3% for the calendar years 2008 to 2010 inclusive.If the population of this city was 664,735 on December 31,2010,what was the population of this city on December 31,2002?

What is the accumulated value of $15,000 over 6 years and 5 months if j4 = 10% and the exact method of accumulating is used? (Answer to the nearest dollar)

Jack invested $1200 into an account for 5-years.The account paid interest at j1 = 4% for the first 2-years and j1 = 6% thereafter.If the annual inflation rate is 2% for each of these 5-years,what is the annual real rate of interest earned over the 5-years?

Mr.Harry Leggs borrows $5000 today,due with interest at j4 = 8% in one lump sum at the end of 2 years.Instead,Mr.Leggs wishes to pay $2000 six months from today and $X in 18 months.If money is worth j12 = 6%,what is X?

You invest some money and earn the following rates of interest: simple interest of 15% for 9 months,followed by j6 = 12% for 18 months,followed by j4 = 5% for 9 months.What is the equivalent rate of interest,j2 earned over the 36 months?

You wish to have $10,000 45 months from now.To accomplish this goal,you deposit $P in an account today paying interest continuously atj× = 8%.What is P?

If money triples in 6 years,what rate of interest,j2,is being earned?

A long term promissory notes for $20 000 is signed on April 15,2010.It is due on October 15,2013 at j2 = 6%.The maturity value of the note is $24 597.48.The note is sold on April 15,2011 to a bank that discounts the note at j4 = 8%.What are the proceeds?

During the spring growing season,a sunflower plant will increase its size by 60% every 7 days.If a plant is currently 5 cm tall,how tall will/should it be in 25 days?

What simple interest rate,r,is equivalent to j4 = 14% over 18 months?

The maturity value of a promissory note due on Sept.14,2010 is $6200.What are the proceeds of the note using the practical (approximate) method on Jun.2,2007 if j2 = 10%?

A person invests in a fund earning interest at j2 = 6%.The annual rate of inflation is 2% in year 1,2.5% in year 2,and 3.0% in year 3.What is the annual real interest rate,compounded once a year,earned over the 3-year period?

A $1000 loan is taken out today.The loan is repaid with a payment of $400 at the end of the 1st year,$800 at the end of the 5th year,and a payment of $X at the end of the 10th year.If j4 = 12%,what is X?

A woman plans to withdraw $1800 18-months from now and $2400 36-months from now.How much does she need to deposit today if the interest rate is j₁₂ = 12% for the first 2 years and j₁₂ = 6% thereafter?

You deposit $1000 today in an account that pays interest at j₂ = 8% for the next 5-years and j₂ = 6% thereafter.How long in total (in years and days) will it take for you to at least double your original investment?

What is the effective annual rate,j,over 7 years that is equivalent to j₆ = 6% for the first two years,j₁₂ = 9% for the next three years,and j₂ = 4% for the last two years?

How long will it take for $750 to accumulate to $1000 if j₂ = 9%?

What is the accumulated value of $15,000 over 6 years and 5 months if j₄ = 10% and the exact method of accumulating is used? (Answer to the nearest dollar)

Jack invested $1200 into an account for 5-years.The account paid interest at j₁ = 4% for the first 2-years and j₁ = 6% thereafter.If the annual inflation rate is 2% for each of these 5-years,what is the annual real rate of interest earned over the 5-years?

Mr.Harry Leggs borrows $5000 today,due with interest at j₄ = 8% in one lump sum at the end of 2 years.Instead,Mr.Leggs wishes to pay $2000 six months from today and $X in 18 months.If money is worth j₁₂ = 6%,what is X?

You invest some money and earn the following rates of interest: simple interest of 15% for 9 months,followed by j₆ = 12% for 18 months,followed by j₄ = 5% for 9 months.What is the equivalent rate of interest,j₂ earned over the 36 months?

You wish to have $10,000 45 months from now.To accomplish this goal,you deposit $P in an account today paying interest continuously atj_× = 8%.What is P?

If money triples in 6 years,what rate of interest,j₂,is being earned?

A long term promissory notes for $20 000 is signed on April 15,2010.It is due on October 15,2013 at j₂ = 6%.The maturity value of the note is $24 597.48.The note is sold on April 15,2011 to a bank that discounts the note at j₄ = 8%.What are the proceeds?

What simple interest rate,r,is equivalent to j₄ = 14% over 18 months?

The maturity value of a promissory note due on Sept.14,2010 is $6200.What are the proceeds of the note using the practical (approximate) method on Jun.2,2007 if j₂ = 10%?

A person invests in a fund earning interest at j₂ = 6%.The annual rate of inflation is 2% in year 1,2.5% in year 2,and 3.0% in year 3.What is the annual real interest rate,compounded once a year,earned over the 3-year period?

A $1000 loan is taken out today.The loan is repaid with a payment of $400 at the end of the 1^st year,$800 at the end of the 5^th year,and a payment of $X at the end of the 10^th year.If j₄ = 12%,what is X?