Exam 9: Compound Interest - Future Value and Present Value

Find the proceeds of a non-interest-bearing promissory note for $175 500 discounted 54 months before maturity at 9.75% compounded semi-annually.

Free

(Essay)

4.9/5

(37)

Question 1

Correct Answer:

Verified

FV = 175000.00; i = 0.04875; n = * 2 = 9
PV = 17500.00(1.04875)-9 = 175000.00(.6515567) = $114022.42

Find the present value and the compound discount of $7500 due in five years and six months if interest is 4.8% compounded quarterly.

Free

(Essay)

4.9/5

(43)

Question 2

Correct Answer:

Verified

PV = 7500.00(1.012)-22 = 7500.00(.7691813) = $5768.86
Discount = 7500.00 - 5768.86 = $1731.14

Debt payments of $1400.00 due today, $5100.00 due in twenty-one months, and $1900.00 due in 4.5 years are to be combined into a single payment due three years from now. What is the size of the single payment if interest is 8.04% p.a. compounded quarterly?

Free

(Essay)

4.9/5

(40)

Question 3

Correct Answer:

Verified

Let the single payment be $x and the focal date be 3 years from now.
x = 1400.00(1.0201)12 + 5100.00(1.0201)5 + 1900.00(1.0201)-6
x = 1400.00(1.2697346) + 5100.00(1.1046221) + 1900.00(.8874492)
x = 1777.63 + 5633.57 + 1686.15
x = $9097.35

What sum of money invested at 8% p.a., compounded quarterly, will grow to $10 000.00 in 12.5 years?

(Essay)

4.9/5

(32)

Question 4

Determine the compound discount on $18875 due in 7.75 years if interest is 9.72% compounded monthly.

(Essay)

4.9/5

(39)

Question 5

To what future value will a principal of $7100.00 amount in three years at 7.6% p.a. compounded: a) annually b) semi-annually c) quarterly d) monthly

(Essay)

4.7/5

(41)

Question 6

A twenty-year note for $10000.00 bearing interest at 12% compounded monthly is discounted at 8% compounded quarterly four years and six months before maturity. Find the proceeds of the note.

(Essay)

4.8/5

(34)

Question 7

An obligation of $5150.00 due in 2.5 years is to be settled by four equal payments due today, nine months from now, 21 months from now, and 27 months from now, respectively. What is the size of the equal payment at 8.88% p.a. compounded quarterly?

(Essay)

4.9/5

(39)

Question 8

An obligation of $17 320 is due two years from now with interest at 9.2% compounded semi-annually. The obligation is to be settled by a payment of $8000 in seven months and a final payment in sixteen months. What is the size of the second payment if interest is now 10.8% compounded monthly?

(Essay)

4.8/5

(40)

Question 9

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?

(Multiple Choice)

4.8/5

(38)

Question 10

Find the future value of and the compound interest on $4575.00 invested at 12.24% compounded monthly for: a) 3.5 years b) 7 years c) 12.5 years

(Essay)

4.9/5

(35)

Question 11

Determine the proceeds of $5000 four years and nine months before the due date if interest is 8% compounded semi-annually.

(Essay)

4.8/5

(43)

Question 12

Six years after Mr. Robertson deposited $7110.00 in a savings account that earned interest at 6.8% p.a., compounded semi-annually, the interest was changed to 7.2% p.a., compounded quarterly. How much was in the account ten years after the deposit was made?

(Essay)

4.8/5

(43)

Question 13

A variable rate demand loan showed an initial balance of $20 000.00, payments of $5000.00 after six months, $10000.00 after one year, and a final payment after two years. Interest was 6% compounded semi-annually for the first year and 12% compounded monthly for the remaining time. How much was the size of the final payment?

(Essay)

4.9/5

(39)

Question 14

Sean started an RRSP on March 1, 2007, with a deposit of $2000.00. He added $1500.00 on March 1, 2008. What is the accumulated value of his account on December 1, 2008, if interest is 6% compounded quarterly?

(Essay)

4.8/5

(46)

Question 15

An investment of $21700 is accumulated at 5.24% compounded quarterly for three and one-half years. At that time the interest rate is changed to 6.12% compounded monthly. How much is the investment worth two years after the change in interest rate?

(Essay)

4.8/5

(38)

Question 16

You invest $10000 in a savings account that pays interest of 8% compounded monthly. What is the value of your account after 14 months?

(Multiple Choice)

4.8/5

(42)

Question 17

Find m for the investment of $1000.00 for 2 years at 1.8% compounded semi-annually.

(Multiple Choice)

4.7/5

(34)

Question 18

Karen started a registered retirement savings plan on February 1, 2000, with a deposit of $2210. She added $2000 on February 1, 2001, and $1475 on February 1, 2004. What is the accumulated value of her RRSP account on August 1, 2005, if interest is 10.44% compounded quarterly?

(Essay)

4.7/5

(39)

Question 19

You have an investment that will mature in 33 months and have a value of $4300. You need some quick cash and decide to sell today at a discount rate of 8.2% compounded quarterly. What is the cash value?

(Multiple Choice)

4.8/5

(32)

Question 20

Showing 1 - 20 of 123

Find the proceeds of a non-interest-bearing promissory note for $175 500 discounted 54 months before maturity at 9.75% compounded semi-annually.

Find the present value and the compound discount of $7500 due in five years and six months if interest is 4.8% compounded quarterly.

Debt payments of $1400.00 due today, $5100.00 due in twenty-one months, and $1900.00 due in 4.5 years are to be combined into a single payment due three years from now. What is the size of the single payment if interest is 8.04% p.a. compounded quarterly?

What sum of money invested at 8% p.a., compounded quarterly, will grow to $10 000.00 in 12.5 years?

Determine the compound discount on $18875 due in 7.75 years if interest is 9.72% compounded monthly.

To what future value will a principal of $7100.00 amount in three years at 7.6% p.a. compounded: a) annually b) semi-annually c) quarterly d) monthly

A twenty-year note for $10000.00 bearing interest at 12% compounded monthly is discounted at 8% compounded quarterly four years and six months before maturity. Find the proceeds of the note.

An obligation of $5150.00 due in 2.5 years is to be settled by four equal payments due today, nine months from now, 21 months from now, and 27 months from now, respectively. What is the size of the equal payment at 8.88% p.a. compounded quarterly?

An obligation of $17 320 is due two years from now with interest at 9.2% compounded semi-annually. The obligation is to be settled by a payment of $8000 in seven months and a final payment in sixteen months. What is the size of the second payment if interest is now 10.8% 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?

Find the future value of and the compound interest on $4575.00 invested at 12.24% compounded monthly for: a) 3.5 years b) 7 years c) 12.5 years

Determine the proceeds of $5000 four years and nine months before the due date if interest is 8% compounded semi-annually.

Six years after Mr. Robertson deposited $7110.00 in a savings account that earned interest at 6.8% p.a., compounded semi-annually, the interest was changed to 7.2% p.a., compounded quarterly. How much was in the account ten years after the deposit was made?

Sean started an RRSP on March 1, 2007, with a deposit of $2000.00. He added $1500.00 on March 1, 2008. What is the accumulated value of his account on December 1, 2008, if interest is 6% compounded quarterly?

An investment of $21700 is accumulated at 5.24% compounded quarterly for three and one-half years. At that time the interest rate is changed to 6.12% compounded monthly. How much is the investment worth two years after the change in interest rate?

You invest $10000 in a savings account that pays interest of 8% compounded monthly. What is the value of your account after 14 months?

Find m for the investment of $1000.00 for 2 years at 1.8% compounded semi-annually.

Karen started a registered retirement savings plan on February 1, 2000, with a deposit of $2210. She added $2000 on February 1, 2001, and $1475 on February 1, 2004. What is the accumulated value of her RRSP account on August 1, 2005, if interest is 10.44% compounded quarterly?

You have an investment that will mature in 33 months and have a value of $4300. You need some quick cash and decide to sell today at a discount rate of 8.2% compounded quarterly. What is the cash value?

Review of Arithmetic

Review of Basic Algebra

Ratio, Proportion, and Percent

Linear Systems

Trade Discount, Cash Discount, Markup, and Markdown

Break-Even and Cost-Volume-Profit Analysis

Simple Interest

Simple Interest Applications

Compound Interest - Further Topics

Ordinary Simple Annuities

Ordinary General Annuities

Annuities Due, Deferred Annuities, and Perpetuities

Amortization of Loans, Including Residential Mortgages

Bond Valuation and Sinking Funds

Investment Decision Applications

Filters