Exam 9: Compound Interest - Future Value and Present Value

A ten-year promissory note discounted after seven years at 10% compounded quarterly has a maturity value of $40 000. Find the proceeds.

A ten-year promissory note dated April 1, 2011, with a face value of $700.00 bearing interest at 7% compounded semi-annually, discounted six years later when money was worth 8.5% compounded monthly. What are the proceeds?

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

A $25 641.00 investment matures in seven years, two months. Find the maturity value if interest is 6.11% p.a. compounded quarterly.

Alflah Islamic bank issued $9300.00 promissory note issued without interest for nine years on September 30, 2001, is discounted on July 31, 2006, at 5.5% compounded quarterly. Find the compound discount.

Determine n if an amount is invested for 3.5 years at 2.25% compounded quarterly.

Determine the discounted value now of $7700.00 due in forty-four months at 7.5% compounded quarterly.

Saeed has taken a loan such that debts of $4000.00, $4500.00 and $5000.00 are due in one year, eighteen months and two years from now respectively. He won a lottery and would like to make a single payment now that would settle the debts if interest is 5.99% p.a. compounded quarterly.

Sagheer received two offers for his property that he is selling. Offer 1 consists of $700 000 immediately and offer 2 consists of $500 000 now and $110,000 per annum for the next 2 years. If money earns 6% compounded semi-annually, which offer has a better economic advantage and by how much. Assume no inflation or discount?

Determine the proceeds of $19 000 three years and three months before the due date if interest is 7.6% compounded semi-annually.

A five-year promissory note with a face value of $3500, bearing interest at 11% compounded semiannually, was sold 21 months after its issue date to yield the buyer 10% compounded quarterly. What amount was paid for the note?

Find the compound amount of $5700.00 at 11.2% p.a. for seven years compounded monthly.

You invest $8500 in a savings account that pays interest of 4.8% compounded monthly. What is the value of your account after 19 months?

The Rob U Blind Bank advertises capital savings at 7.128% compounded semi-annually while Take Your Money Trust offers premium savings at 7.1% compounded monthly. Suppose you have $4400.00 to invest for two years. a)Which deposit will earn more interest? b)What is the difference in the amount of interest?

ICICI quotes nominal annual interest rate of 6.6% compounded annually, 6.5% compounded semi-annually and 6.4% compounded monthly on 5 year compound interest GICs. What rate should an investor choose?

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?

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.

You lend a friend $800 and they agree to make quarterly payments for 1 year. You charge your friend 8.52% compounded quarterly. What is the size of the payments?

Jenni started a registered retirement savings plan on January 1, 2008, with a deposit of $2000. She added $3000 on January 1, 2009, and $2000 on January 1, 2010. What is the accumulated value of her RRSP account on July 1, 2010, if interest is 12% compounded quarterly?

Keith took a loan of $20 000 to buy a car at an interest of 4% compounded quarterly, with no monthly payments. On first, second and third anniversary of the loan, he made payments of $5000. What payment on the fourth anniversary will eliminate the debt?