HW2_Financial_Mathematics_-_Part_1_Solution_Manual-1

HW2_Financial_Mathematics_-_Part_1_Solution_Manual-1 -...

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SILABO – GERENCIA EMPRESARIAL Universidad Iberoamericana UNIBE Due Date : February 12 2011 Deliver hard copy at the beginning of class. Note: In all the problems set, even though those who involve multiple choices questions, the student must provide a clear mathematical argument for the response. Otherwise a partial credit will be given for correct answers. HOMEWORK 2: Solution Manual 1. Logan borrowed $24,318.79 and will have to repay a total of $27,174.25. How much interest will he pay? $2855.46 2. Hannah borrowed $4,200 from Fifth National Bank, agreeing to pay $400 in interest for this loan. How much will she pay in total? $4600 3. Jonas is borrowing $249.76 from Katrina for 1 year, and has agreed to pay $35.50 in interest. How much will Katrina receive when he pays her back? $285.26 Page  1  of  8 FINANCIAL MATHEMATICS HOMEWORK 2: PART 1
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4. Haley has agreed to loan Taylor $85,529.68 and Taylor has agreed to pay $7,261.13 in interest. How much in total will Taylor have to give Haley when she repays the loan? $92,790.81 In each of the following situations, identify (a) the principal, (b) the term, (c) the creditor, and (d) the debtor. 5. Jin’s parents loaned her $2,500. She promised to pay them back $2,750 in 2 years. a) $2500, b) 2 years, c) Jin’s parents, d) Jin 6. Promethean Combustion Products borrowed $800,000 from Venture Capital Funding Corp. Three years from now Promethean will be required to pay back a total of $965,000. a) $800,000, b) 3 years, c) Venture Capital, d) Promethean Combustion 7. Rewrite each of the following percent interest rates as decimals. a) 12% = 0.12 b) 15.3% = 0.153 c) 8% = 0.08 d) 4.35% = 0.0435 e) 0.75% = 0.0075 f) 125% = 1.25 g) 9 ½ % = 0.095 h) 19 ¾% = 0.1975 i) 5 5/8 % = 0.05625 j) 20 7/16 % = 0.204375 k) 7/8% = 0.00875 l) 375 1⁄8% = 3.75125 Page  2  of  8
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8. The Village of West Rochester made a short-term deposit of $476,903 in a local bank. When the village withdrew its funds, the account had grown to $479,147. How much interest did it earn on the deposit? $2,244 9. Levar’s Landscaping borrowed $79,500 to finance the purchase of new equipment. The simple interest rate was 83⁄8%, and the term of the loan was 1 year. Calculate the total interest that the business will pay for this loan. $6,658.13 10. Martina deposited $4,257.09 in a certificate of deposit. Two years later, the value of her account had grown to$4,503.27. How much interest did she earn? $246.18 11. Answer the following questions a. Tom deposited $5,000 in a 2-year certificate of deposit paying 8% simple interest. What was the value of his account at the end of the 2 years? $5,800 b. Jerry deposited $5,000 in a 1-year certificate deposit paying 8% simple interest. At the end of the first year, he took his money and opened up a new 1-year certificate of deposit, also paying 8% simple interest. How much was Jerry’s account worth at the end of the 2 years? $5,832
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This note was uploaded on 06/22/2011 for the course ALL 105 taught by Professor Laus during the Spring '11 term at FIU.

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HW2_Financial_Mathematics_-_Part_1_Solution_Manual-1 -...

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