Exam 9: Compound Interest: Further Topics and Applications

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

At the end of 2009, the RBC Canadian Dividend Fund was the largest equity mutual fund in Canada. The aggregate market value of its holdings at the end of 2009 was $9.995 billion. The fund's annual returns in successive years from 2000 to 2009 inclusive were 28.3%, 4.4%, -0.5%, 23.5%, 12.9%, 21.1%, 15.1%, 3.0% - 27.0%, and 27.3% respectively. For the 3-year, 5-year, and 10-year periods ending December 31, 2009, what were the fund's equivalent annually compounded returns?

-Calculate the missing quantities in Row

-Calculate the missing quantities in Row J.

An invoice indicates that interest at the rate of 1.75% per month will be charged on overdue amounts. What effective rate of interest is being charged?

The following table contains 1981 and 2006 population figures for five provinces. Calculate each province's equivalent compound annual rate of population increase during the period.

On overdue accounts the telephone company charges 1.25% per month. What is the effective annual rate?

-Calculate the missing quantities in Row M.

Calculate nominal rate of interest (to the nearest 0.01%):

The following table presents the rates of total return in successive years from 2004 to 2008 for the AGF Canadian Stock 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?

At what annually compounded interest rate will an investment of $71,294.69 double in 90 months?

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

A $4000 loan at 7.5% compounded monthly was settled by a single payment of $5000 including accrued interest. Rounded to the nearest day, how long after the initial loan was the $5000 payment made? For the purpose of determining the number of days in a partial month, assume that a full month has 30 days.

An investor's portfolio increased in value by 53% over a five-year period while the Consumer Price Index rose from 121.6 to 135.3. What was the annually compounded real rate of return on the portfolio for the 5 years?

What is the monthly compounded nominal rate that is equivalent to 7.8% compounded semi-annually?

The proceeds from the sale of a $4500 five-year promissory note bearing interest at 9% compounded quarterly were $6055.62. How long before its maturity date was the note sold if it was discounted to yield 10.5% compounded monthly?

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

Consider the Province of Newfoundland strip bond in Table 9.1. a) Calculate the bond's yield to four-figure accuracy on June 1, 2009, based on the quoted price of $48.550. b) What would the yield be one year later if the bond's price remains the same?

-Calculate the missing quantities in Row H.

If the population of Dodge City is decreasing at a rate of 19% per year, how long will it take to decrease from 7,700 to 2,000?