MartensLA9 - power of the dollar. The CPI is the buying...

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1. Find the compound amount and the interest earned for the following: Amount:  $980,   Rate: 8%, Compounded: Quarterly, Time: 5 years  980(1+.02)^20 = 1456.22845 1456.23 2. Find the interest earned if $2750 is deposited on June 12 and withdrawn on  August 30. Assume 3.5% interest compounded daily.  2750(1+.000095890411)^80 = 2771.17599 2771.18 3. Find the present value for the following.     Amount needed: $20,000,  Time: 10  years,   Rate: 5%    Compounded: semiannually.  10*2 = 20, .61027 20000 * .61027 = 12205.4 4. Define inflation and the consumer price index.  Inflation is when more money is dumped into the economy diminishing the buying 
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Unformatted text preview: power of the dollar. The CPI is the buying power of a consumer for a basket of goods. This price fluxgates with inflation and with advances in technology as well as other factors. 5. Application Problem: Give one example where you may use a concept found in this chapter. While trying to find the best rate of interest between three banks I currently use I calculated the interest for the different terms and compound rates to determine the best rate....
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This note was uploaded on 12/30/2009 for the course MATH 1220 taught by Professor Roarty during the Spring '09 term at Metropolitan Community College- Omaha.

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