Question 1

Fahira invested $5000.00 at 4.8% compounded quarterly on January 1, 2012. On July 1, 2013 the rate changed to 5.6% p.a. compounded semi-annually. Calculate the amount Fahira will have on January 1, 2005.

Accepted Answer

The answer of Fahira invested $5000.00 at 4.8% compounded quarterly...

Question 2

Accumulated $1720.00 at 8.4% p.a. compounded monthly from March 1, 2011, to July 1, 2013, and thereafter at 8.88% p.a. compounded quarterly. What is the amount on April 1, 2015?

Accepted Answer

The answer of Accumulated $1720.00 at 8.4% p.a. compounded monthly...

Question 3

Two years after Sean deposited $5000 in a savings account that earned interest at 6% compounded monthly, the rate of interest was changed to 6.4% compounded semi-annually. How much was in the account fifteen years after the deposit was made?

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Question 4

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 5

Find i if an amount is invested at 6.00% compounded every 3 months.

Accepted Answer

A)  3.00% 
B)  2.00% 
C)  6.00% 
D)  1.50% 
E)  0.02

Question 6

What is the cash value of $5 000 if it is discounted for 5 years at 10% compounded yearly?

Accepted Answer

A)  $3100.61 
B)  $3000.61 
C)  $3143.28 
D)  $3228.43 
E)  $3104.61

Question 7

Orange Credit Union expects an average annual growth rate of 16% for the next four years. If the assets of the credit union currently amount to $2.7 million, what will the forecasted assets be in four years?

Accepted Answer

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Question 8

What sum of money invested at 5.95% p.a., compounded semi-annually, will grow to $28000.00 in 19.5 years?

Accepted Answer

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Question 9

On April 15, 2005, a ten-year note dated June 15, 2001, is discounted at 8.2% compounded quarterly. If the face value of the note is $4000.00 and interest is 7.2% compounded quarterly, find the compound discount.

Accepted Answer

The answer of On April 15, 2005, a ten-year note...

Question 10

Betty deposited $17150.00 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 $17150.00 in an RRSP on...

Question 11

An investment of $5000.00 earns interest at 6% p.a. compounded monthly for two years. At that time the interest rate is changed to 8% compounded semi-annually. How much will the accumulated value be three and a half years after the change?

Accepted Answer

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Question 12

The Get What You Pay For Bank advertises capital savings at 12% compounded monthly while Give Me Your Money Trust offers premium savings at 12.36% compounded yearly. Suppose you have $500.00 to invest for two years.
a) Which deposit will earn more interest?
b) What is the difference in the amount of interest?

Accepted Answer

The answer of The Get What You Pay For Bank...

Question 13

A ten-year promissory note dated April 1, 2001, with a face value of $4700.00 bearing interest at 7.2% compounded semi-annually, discounted seven years later when money was worth 9.92% compounded monthly. Find the proceeds.

Accepted Answer

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Question 14

Find the sum of money that accumulates to $11415.00 at 7.6% compounded quarterly in six years, seven months.

Accepted Answer

The answer of Find the sum of money that accumulates...

Question 15

Debts of $400.00, $450.00 and $500.00 are due in one year, eighteen months and thirty months from now respectively. Determine the single payment now that would settle the debts if interest is 8% p.a. compounded quarterly.

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Question 16

You invest $12 300 of your money in a locked-in savings account that earns 4.92% compounded monthly for 7 months. You have a family emergency and need to withdraw your funds 2 months early. You sell the savings account at a 5.6% compounded quarterly interest rate. How much did you sell the account for?

Accepted Answer

A)  $11569.61 
B)  $12956.61 
C)  $12540.61 
D)  $12659.61 
E)  $12666.61

Question 17

Alternative Savings offers five-year term deposits at 10% compounded annually while your credit union offers such deposits at 9.6% compounded quarterly. If you have $1000 to invest, what is the maturity value of your deposit
a) at Alternative Savings?
b) at your credit union?

Accepted Answer

The answer of Alternative Savings offers five-year term deposits at...

Question 18

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.

Accepted Answer

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Question 19

An eleven-year promissory note discounted after six years at 9.2% compounded quarterly has a maturity value of $71500. Find the proceeds.

Accepted Answer

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Question 20

A loan of $2500.00 made today is to be repaid in three equal installments due in one year, two years, and four years respectively. What is the size of the equal installments if money is worth 8.4% compounded monthly?

Accepted Answer

The answer of A loan of $2500.00 made today is...

Exam 9: Compound Interest - Future Value and Present Value