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# ex_ch10 - deposits be in order to pay oF the loan from the...

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Math 1711 Examples, Chapter 10 1. What simple interest rate was charged on a \$1000 loan if you must repay \$1100 after 6 months? 2. At what interest rate, compounded monthly, should you invest your money if you want your investment to triple in 30 years? 3. Find the present value of \$20,000 payable in 5 years at 4% interest, compounded quarterly. 1

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4. Bank A offers 6% simple interest and Bank B offers 4.5% interest, compounded semi- annually. If you wish to invest \$100 for 5 years, which bank should you choose? 5. Find the effective rate of interest of \$100 invested at 7%, compounded weekly. 6. You deposit \$1000 a year in an IRA at an interest rate of 7%, compounded annually. How much is the annuity worth after 25 years? 2
7. You set up a sinking fund, at 8% interest, compounded monthly, to pay off a loan of \$10,000, repayable in 10 years at 12% simple interest.

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Unformatted text preview: deposits be in order to pay oF the loan from the sinking fund? 8. You wish to be able to withdraw \$2000 a month from your IRA for 20 years after you retire. If you can invest at an interest rate of 6%, how much money will you need in the IRA at the time of retirement? If you are able to invest in the IRA at 7% interest for 20 years, how much should you deposit each month? 3 9. You decide to buy a \$200,000 home. Your down-payment must be 20% of the cost, and the balance will be amortized at 7%, compounded monthly, for 30 years. (a) What is the down-payment? (b) What is the loan amount? (c) How much are your monthly payments? (d) What is the total amount of interest paid? (e) What is the unpaid balance after 10 years? After 11 years? (f) How much interest was paid in the 11th year? 4...
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