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HW2-Part-1-Group(ValerieAzorJoaquinMiguel)-Sec02

HW2-Part-1-Group(ValerieAzorJoaquinMiguel)-Sec02 -...

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Universidad Iberoamericana UNIBE Financial Mathematics Professor Osvaldo Lagares Homework 2-Part 1 Valerie Bodden Kluge (10-0014) Azor Hazoury (10-1192) Joaquin Castillo (10-0084) Miguel Iglesias (10-0085) February 12, 2011 Page 1 of 14
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Santo Domingo, Dominican Republic Page 2 of 14
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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. 1. Logan borrowed $24,318.79 and will have to repay a total of $27,174.25. How much interest will he pay? 24,318.79 - 24,318.79= $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? 4,200+200= $4600 Page 3 of 14
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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? 249.76+35.50 = $285.26 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? 85,529.68 + 7,261.13 =$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. 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. Principal: $800,000.00 Term: Three years Creditor: Venture Capital Funding Corp. Debtor: Promethean Combustion Products 6. 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 Page 4 of 14
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g) 9 ½ % = 9.5%= 0.095 h) 19 ¾% = 19.75%= 0.1975 i) 5 5/8 % = 5.625%= 0.05625 j) 20 7/16 % = 20.4375% = 0.204375 k) 7/8% = 0.875%= 0.0875 l) 375 1⁄8% = 375.125 %= 3.75125 7. 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? $479,147 - $476,903 = $2,244 8. 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. I =PRT I= (79,500)(0.08375)(1) I= $6,658.125 9. 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? 4,503.28 – 4257.09 = $246.19 10. Answer the following questions Page 5 of 14
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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? I= PRT = I=(5000)(0.08)(2) = 800 5,000+800 = 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?
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