Question

1)Sophie invested an amount of $24,000 in a mutual fund. After 3 years and 3 months the accumulated value of her investment was $25,815.47. What is the quarterly compounded nominal interest rate of the investment?

2)Helen heard that she could triple her money in 27 years if she invested it in her friend's telecommunications business. What nominal interest rate compounded quarterly does the business offer?

3)If an investment grew to $15,000 in 2 years and the interest amount earned was $1,150, calculate the nominal interest rate compounded quarterly.

4)How long did it take for an investment of $27,500 to grow to $33,000 at 1.86% compounded semi-annually?

5)Hewlett Plastics Inc. received a loan of $60,000 at 3.75% compounded quarterly to purchase machinery for its factory. Calculate the time period of the loan if the total interest paid was $32,165.48.

6)How long would it take for an investment to double its original amount at 3.62% compounded monthly?

Answer #1

1)Hewlett Plastics Inc. received a loan of $60,000 at 3.75%
compounded quarterly to purchase machinery for its factory.
Calculate the time period of the loan if the total interest paid
was $32,165.48.
2)How long would it take for an investment to double its
original amount at 3.62% compounded monthly?
3)Calculate the effective interest rate for each of the
following nominal interest rates:
a. 2.16% compounded quarterly.
Round to two decimal places
b. 2.16% compounded monthly.
4)Lucy invested $210,000 to purchase...

Helen invested the profit of her business in an investment fund
that was earning 3.25% compounded monthly. In 3 years, she began
withdrawing $3,500 from this fund at the end of every 6 months. If
the money in the fund lasted for the next 4 years, how much money
did she initially invest in the fund?

Find the amount at the end of two years and seven months if
P1000 is invested at 8% compounded quarterly using simple interest
for anytime less than a year interest period.

Linda Roy received a $221,000 inheritance after taxes from her
parents. She invested it at 5.5% interest compounded quarterly for
6 years. A year later, she sold one of her rental properties for
$231,000 and invested that money at 4.5% compounded semiannually
for 5 years. Both of the investments have matured. She is hoping to
have at least $521,000 in 10 years compounded annually at 3.5%
interest so she can move to Hawaii.
Future Value of Inheritance
Investment: $
Future...

An amount is invested at 8%, compounded quarterly, for 2 years.
What rate and what number of periods would be used to find a future
value factor from the tables in order to calculate the future value
of this investment?
a)2% for 4 periods
b) 8% for 2 periods
c)2% for 8 periods
d)8% for 4 periods
An investment earning 12% interest compounded semi-annually,
will accumulate to a greater amount in the future than an equal
investment earning 12% compounded...

If $600is invested at 8% compounded quarterly,what is the amount
after 5 years?How much interest is earned?

1. You invested $6,000 at the end of each year for 7 years in an
investment fund. If the balance in the fund at the end of 7 years
was $54,000, what was the nominal interest rate compounded
annually?
2. Quarter-end payments of $1,510 are made for 9 years to settle
a loan of $38,660. What is the effective interest rate charged on
this loan?
3. Quarter-end payments of $1,510 are made for 9 years to settle
a loan of...

Ali invested $2,100 at the beginning of every 6 months in an
RRSP for 11 years. For the first 5 years it earned interest at a
rate of 3.50% compounded semi-annually and for the next 6 years it
earned interest at a rate of 6.40% compounded semi-annually.
a. Calculate the accumulated value of his
investment at the end of the first 5 years.
$63,900.39
$64,865.00
$22,733.34
$23,131.17
b. Calculate the accumulated value of her
investment at the end of 11...

1. What nominal rate compounded annually would
quadruple the principal in 4
years?
2. A master card compounds monthly and charges an interest of 1.5%
per month.
What is the effective interest rate per year?
3. How long will it take money to triple itself if invested at 8%
compounded
annually?
4. Microsoft CEO, billionaire Bill Gates willed that a sum of $25
million be given to a
child but will be held in trust by the child’s mother until...

For a deposit of $1027 at 6.4% over 2 years, find the
interest earned if interest is compounded semiannually,
quarterly, monthly, daily, and continuously.
The interest earned if interest is compounded semiannually
is----
2
Find the present value of the following future amount.
$2000 at 10% compounded annually for 30 years
The present value is-----
3 Suppose a savings and loan pays a nominal rate of
1.4%
on savings deposits. Find the effective annual yield if interest
is compounded quarterly...

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