Exam 9: Compound Interest: Further Topics and Applications

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

Columbia Trust wants its annually, semiannually, and monthly compounded five-year GICs all to have an effective interest rate of 5.75%. What nominal annual rates should it quote for the three compounding options?

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

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

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

An initial $1800 investment was worth $2299.16 after two years and nine months. What quarterly compounded nominal rate of return did the investment earn?

-Calculate the missing quantities in Row I.

-Calculate the missing quantities in Row P.

Consider the Province of British Columbia strip bond in Table 9.1. a) Calculate the bond's market price on June 1, 2009 based on the quoted yield of 4.311% compounded semiannually. b) What would the price be one year later if the bond's yield remains the same?

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

To be equivalent to 10% compounded annually, what must be the nominal rate with: a. semiannual compounding? b. quarterly compounding? c. monthly compounding?

What is the monthly compounded nominal rate that is equivalent to 19.56% compounded annually?

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

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

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

What effective rate of interest is equivalent to a nominal rate of 19.214% compounded monthly?

Over six years Craig earned interest of $8,400 on an investment of $20,000. What effective rate of return did he earn?

Calculate the income yield, capital gain yield, and rate of total return in each of 2005 and 2006 for Loblaw Companies' share and Mawer New Canada Fund units. Use the data in Tables 9.3, and 9.4.

Calculate the effective annual rate for 9.4% compounded quarterly.

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