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MA373 S12 Homework

# MA373 S12 Homework - Math 373 Spring 2012 Homework...

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January 18, 2012 Math 373 Spring 2012 Homework Non-Interest Theory 1. 1000 + 1002 + . . . + 2000 = 2. 6 + 18 + 54 + 162 + . . . + 4374 = 3. 1 + 0.9 + 0.9 2 + . . . 0.9 10 = 4. If 5 (1 ) 1.1, i  calculate 5 10 100 1 (1 ) ) ... (1 ) . i i i Chapter 1, Section 3 5. Tori borrows 1000 from Grace. Two years later, Tori repays the loan with a payment of 1200. Calculate each of the following: a. The principal on the loan. b. The amount of interest that Tori pays. c. (2) a d. [0,2] i 6. You are given 2 ( ) 1 0.04 0.02( 1) a t t t   . Calculate: a. If 100 is invested at time 0, how much will be in the account at time 5. b. [4.5,5] i c. 5 i 7. Alex invests 10,000 in and account that has an accumulation function of 2 tt  . At the end of one year Alex has 11,500 in his account. At the end of 2 years, Alex has 14,000. Determine ,,  and .

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January 18, 2012 8. Poppy has a choice of two investments. Investment 1 has an accumulation function of 3 ( ) 1 0.001 a t t  . Investment 2 has an accumulation function of 2 ( ) 1 0.01 a t t . a. Which investment should Poppy use if Poppy will be investing for 5 years. Explain why. b. Which investment should Poppy use if Poppy will be investing for 15 years. Explain why. c. If Poppy invests 100 into both investments, at what time will the accumulated value of both investments be equal. 9. Book Problem 1.3, Number 5 10. Book Problem 1.3, Number 6 Chapter 1, Section 4 11. Ben invests 1500 in an account earning simple interest of 5%. a. Calculate the amount of interest earned in the first year. b. Calculate the amount of interest earned in the 20 th year. c. Calculate the amount that Ben will have at the end of 20 years. 12. Book Problem 1.4, Number 3 13. Tori borrows 1000 from Grace. Two years later, Tori repays the loan with a payment of 1200. Assuming that Tori is paying simple interest, calculate the annual simple interest rate that she is paying on the loan. 14. Katie Rose borrows K to buy a new car. The loan has simple interest of 8%. At the end of 5 years, Katie Rose repays the loan with a payment of 28,294. Determine K. 15. Alice invests 500 in an account earning simple interest at a rate of 7.5%. At the end of t years, Alice’s investment will have doubled. Determine t. (Note: t does not need to be an integer.) 16. Taylor lends Nick 1000 at a simple interest rate of 20%. What will be the effective interest rate on the loan during year 10. 17. Emily invests 1000 at a simple rate of interest S. Emily will earn an effective rate of interest of 2% in the 31 st year of her investment. How much will Emily have at the end of 40 years?
January 18, 2012 18. Rawan invests in fund earning simple interest of 10%. Her effective interest rate for the n th year (i n ) is 5%. Calculate n. Chapter 1, Section 5 19. Kwaku invests 5500 in an account earning compound interest at an annual effective interest rate of 6.25%. a. Calculate the amount of interest that Kwaku will earn in the 4 th year. b. How much will Kwaku have in the account at the end of 8 years.

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MA373 S12 Homework - Math 373 Spring 2012 Homework...

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