maths homework set 2

# maths homework set 2 - Math1003 Algebra and Calculus Fall...

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Math1003 Algebra and Calculus, Fall 2011 Name: Ka Yee Leslie TSANG Homework-II : Due 09/21/2011 at 11:50pm HKT The three fundamental formulas you need for solving the problems in this homework set are the following: The Compound Interest Formula: A = P ( 1 + r m ) mt where m = number of compounding in one year, t = number of years, r = annual interest rate, P = principal, and A = compound amount. The Future Value of an Annuity: FV = PMT ( 1 + i ) n - 1 i where FV = the future value of the annuity, i = interest rate per period, PMT = periodic payment, and n = number of payments. The Present Value of an Annuity: PV = PMT 1 - ( 1 + i ) - n i where PV = the present value of the annuity, i = interest rate per period, PMT = periodic payment, and n = number of payments. To analyse a basic problem in ﬁnance, sketch a diagram to show clearly the periods, interest rate per period and payments involved. 1. (2 pts) If \$100 is borrowed and the interest after 24 months is \$36, what is the annual interest rate for a simple interest loan? Rate = % Answer(s) submitted: 18 (correct) 2. (2 pts) Gordon has heard that fusion powered SUV’s will be available in 10 years at a price of 120000 dollars. How much should he invest now, at 8 percent interest compounded annu-

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maths homework set 2 - Math1003 Algebra and Calculus Fall...

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