Exam 9: Compound Interest: Further Topics and Applications

Calculate the term of the loan or investment:

One of the more volatile mutual funds in recent years has been the AGF China Focus Fund. The fund's annual returns in successive years from 2003 to 2008 inclusive were 20.8%,-11.0%, 63.4%,_ 9.3%, 8.6%, 67.6%, 30.5 and -41.7, respectively. What was the fund's equivalent compound annual return for the six years ended December 31, 2008?

Calculate the income yield, capital gain yield, and rate of total return in each of 2005 and 2006 for Research in Motion shares and PH&N Bond Fund units. Use the data in Tables 9.3, and 9.4.

The following table presents the rates of total return in successive years from 2004 to 2008 for the Sprott Canadian Equity Fund and for the benchmark Toronto Stock Exchange S&P/TSX Composite Index. By how much did the mutual fund's overall percentage return exceed or fall short of the Index's growth?

Is FV negative if you lose money on an investment?

Calculate the equivalent interest rate (to the nearest 0.01%)

What is the semi-annually compounded nominal rate that is equivalent to 10.5% compounded monthly?

Calculate the equivalent interest rate (to the nearest 0.01%)

-Calculate the missing quantities in Row

-Calculate the missing quantities in Row L.

Calculate the equivalent interest rate (to the nearest 0.01%)

Calculate the income yield, capital gain yield, and rate of total return in each of 2005 and 2006 for Cameco Corporation shares and Sprott Canadian Equity Fund units. Use the data in Tables 9.3 and 9.4.

One thousand shares of Frontier Mining were purchased at $6.50 per share. The share price rose 110% in the first year after purchase, declined 55% in the second year, and then dropped another 55% in the third year. a) What was the percent change in share price over the entire three years? b) How much (in dollars and cents) did the share price drop in the second year?

For an investment to double in value during a 10-year period. a) What annually compounded rate of return must it earn? b) What semiannually compounded rate of return must it earn? c) What monthly compounded rate of return must it earn?

Which scenario had the higher periodic rate of return: "$1 grew to $2" or "$3 grew to $5"? Both investments were for the same length of time at the same compounding frequency. Justify your choice

Calculate the equivalent interest rate (to the nearest 0.01%)

Calculate the term of the loan or investment:

Calculate the missing interest rate (to the nearest 0.01%)

-Calculate the missing quantities in Row O.

Calculate the equivalent interest rate (to the nearest 0.01%)