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IT 45000 Practice Problems
Ch. 12
1.
You took out a $1500 loan 6 years ago and the loan payoff amount now is $1850.
At what simple interest rate per year did
you borrow the money?
2.
If problem 1 was compound interest per year, at what rate did you borrow the money?
3.
You expect to buy a new car upon graduation, 4 years from now.
Current statistics indicate that the average price of a new
car in 4 years will be $25,000.
How much money must you invest now at 7% per year, if you want to have enough to buy
the car upon graduation?
4.
An investor has an option to purchase a tract of land that is worth $6,302 now.
If the value of the land increases at 8% per
year, estimate how many years must pass for the tract’s value to be $10,000.
5.
Suppose you make 15 equal annual deposits of $1000 each into a bank account paying 5% interest per year.
The first
deposit will be made one year from today.
How much money can be withdrawn from this account immediately after the 15
th
deposit?
6.
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This note was uploaded on 10/02/2011 for the course IT 450 taught by Professor Staff during the Fall '08 term at Purdue University.
 Fall '08
 Staff

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