hw5_I - Business Mathematics I Homework 5 part I Prepared...

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Business Mathematics I Homework 5, part I Prepared for Math 173 Pima Community College By Submitted on 7/29/07
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1. If $10,000 is invested for 2 years at 10 percent interest, compounded semi-annually, what is the amount at the end of the two years? Solution 06 . 155 , 12 $ 2 1 . 1 10000 1 4 0 + = + = P n r P P nt 2. What is the value of $160,000 after 5-1/2 years at 3.75%, compounded quarterly. Solution 82 . 460 , 196 $ 4 0375 . 1 000 , 160 1 22 0 + = + = P n r P P nt 3. What is the effective annual yield for the above scenario? Solution % 82 . 3 1 22 0375 . 1 1 1 22 - + - + = n n r APY 4. What rate, r , compounded monthly, will yield 4.25%? Solution ( 29 % 163 . 4 66 1 0425 . 1 1 0425 . 1 66 0425 . 1 66 1 0425 . 1 % 25 . 4 1 66 1 1 1 66 66 66 66 = - - = = + = - + - + = r r r r n r APY n 5. ( i ) Find the value of $750,000 after 8 years and 2 months, if it is invested at a rate of 4.1%, compounded continuously. ( ii ) What is the yield on this investment?
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