Question 1

Derik bought a promissory note this morning. Find the maturity value of the promissory note for $1200.00 dated March 31, 2016, and due on August 31, 2026, if interest is 3.64% compounded quarterly.

Accepted Answer

A)  $1741.51 
B)  $1318.75 
C)  $1750.28 
D)  $5323.00 
E)  $1724.05

Question 2

Gabriel defaulted on her tax worth $4189.00. CRA audited her and after 31 months sent her the tax bill, which also included an interest rate compounded annually at 3.75% p.a. What is the total tax due, if Gabriel pays it immediately on receiving the notice?

Accepted Answer

A)  $13 114.19 
B)  $4614.12 
C)  $4222.90 
D)  $4606.94 
E)  $4592.83

Question 3

A $8000.00 investment matures in five years, three months. Find the maturity value if interest is 12% p.a. compounded quarterly.

Accepted Answer

The answer of A $8000.00 investment matures in five years,...

Question 4

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 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

Two payments of $49 000 each must be made 3 year and 5 year from now. If money can earn 4.9% compounded monthly, what single payment 4 years from now would be equivalent to the two scheduled payments?

Accepted Answer

The answer of Two payments of $49 000 each must...

Question 7

A $5725.00 investment matures in three years, seven months. Find the maturity value if interest is 9.16% p.a. compounded quarterly.

Accepted Answer

The answer of A $5725.00 investment matures in three years,...

Question 8

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.

Accepted Answer

The answer of Debts of $400.00, $450.00 and $500.00 are...

Question 9

You invest $10 000 in a savings account that pays interest of 8% compounded monthly. What is the value of your account after 14 months?

Accepted Answer

A)  $10 970.88 
B)  $10 904.88 
C)  $10 074.88 
D)  $10 004.88 
E)  $10 974.88

Question 10

For a nominal interest rate of 9%, what is the compounding frequency if the periodic interest is 0.75%?

Accepted Answer

A)  8 
B)  12 
C)  6 
D)  1 
E)  24

Question 11

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

The answer of Orange Credit Union expects an average annual...

Question 12

A variable rate demand loan showed an initial balance of $20 000.00, payments of $5000.00 after six months, $10000.00 after one year, and a final payment after two years. Interest was 6% compounded semi-annually for the first year and 12% compounded monthly for the remaining time. How much was the size of the final payment?

Accepted Answer

The answer of A variable rate demand loan showed an...

Question 13

Calculate the cash value of a bond that will mature with a value of $16 500 in 7 years and 5 months. The bond is discounted at 5.8% compounded semi-annually.

Accepted Answer

A)  $10 797.48 
B)  $10 979.48 
C)  $10 997.48 
D)  $10 779.48 
E)  $11 117.48

Question 14

A $95 600.00, non-interest-bearing note due August 1, 2017, discounted on March 1, 2015, at 1.49% compounded monthly. Find the proceeds.

Accepted Answer

A)  $92 220.90 
B)  $92 335.41 
C)  $92 106.54 
D)  $99 225.96 
E)  $92 243.34

Question 15

Find the principal which will grow to $7258.00 at 6.58% compounded semi-annually in four years and five months.

Accepted Answer

The answer of Find the principal which will grow to...

Question 16

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

The answer of An seven-year promissory note for $31 000...

Question 17

A $41 200.00, non-interest-bearing note due August 1, 2003, discounted on March 1, 2001, at 7.32% compounded monthly. Find the proceeds.

Accepted Answer

The answer of A $41 200.00, non-interest-bearing note due August...

Question 18

How much will Ahsan's registered retirement savings deposit of $30 000.00 be worth in 21 years at 5% compounded quarterly?

Accepted Answer

A)  $1 807 267.24 
B)  $83 578.88 
C)  $85 173.39 
D)  $38 941.88 
E)  $81 044.55

Question 19

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?

Accepted Answer

The answer of Two years after Sean deposited $5000 in...

Question 20

A seven-year, non-interest-bearing note for $6532.00 is discounted three years and two months before its due date at 9.12% compounded quarterly. Find the proceeds of the note.

Accepted Answer

The answer of A seven-year, non-interest-bearing note for $6532.00 is...

Exam 9: Compound Interest - Future Value and Present Value