MA 373 S11 Quiz 2 Solutions

MA 373 S11 Quiz 2 Solutions - Quiz 2 Math 373 September 20,...

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Unformatted text preview: Quiz 2 Math 373 September 20, 2011 1. Daniel loans Qian 15,000. Qian agrees to repay the loan with three annual payment. The first payment is 5000, the second payment is 6000, and the last payment is 7000. Daniel reinvests each loan repayment at an annual effective interest rate of 8%. a. Calculate the Qian’s annual rate of interest on the loan. 599a?) @9496; #729th SQQQ \‘ 2» 5 62:; g a m WQQQ b. Using the bottom line approach, determine Daniel’s annual effective yield on this transaction. 52995) (@9311) Womb l—d—a—r —l l 1is ‘ Z” 5 3; r a 5%) QQD+VOQQ Amoalgr Sboo (loft) wezlgoom . “3 2. Kalli invested 50,000 in an account three years ago. One year ago, the account had a balance of 100,000 and Kalli withdrew $50,000. Today, Kalli has 30,000 in the account. Determine the annual effective time weighted return earned by Kalli on this account. , ~ g? 0@ WoolQQ éCDJO ’3 3 Quiz 2 Math 373 September 20, 2011 1. Daniel loans Qian 15,000. Qian agrees to repay the loan with three annual payment. The first payment is 7000, the second payment is 6000, and the last payment is 5000. Daniel reinvests each loan repayment at an annual effective interest rate of 8%. a. Calculate the Qian’s annual rate of interest on the loan. }.Q¢_ME_Mmm_mmwwgw%mflMgflmfiqoxajgawmt.Lt_mmywawm.oo.aa.aomatkfli 0 l IQQDQ £5. a 5:000 ad 3:: @572: “a” ““’ LQQQQ (flog W @3613 b. Using the bottom line approach, determine Daniel’s annual effective yield on this transaction. 5 (95:30 5:? a , $9 “:2; i, t L w ,1 £195; of! a, if “7 gag; 5’ l, (:3 t {a pm g; z. p mm , “a j i. l 9, {a 1M. 80 /@§Q§ 2. Kalli invested 50,000 in an account three years ago. One year ago, the account had a balance of 120,000 and Kalli withdrew $50,000. Today, Kalli has 40,000 in the account. Determine the annual effective time weighted return earned by Kalli on this account. figéfiflfl / QCQQ % @QQ (233:3 )flmw I WM ...
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This note was uploaded on 02/26/2012 for the course MA 373 taught by Professor Staff during the Fall '08 term at Purdue University-West Lafayette.

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MA 373 S11 Quiz 2 Solutions - Quiz 2 Math 373 September 20,...

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