MA373 S12 Quiz 2 Solutions

# MA373 S12 Quiz 2 Solutions - Math 373 Spring 2012 Quiz 2...

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Unformatted text preview: Math 373 Spring 2012 Quiz 2 February 2, 2012 l. Jacqui loans 2000 to Zac who agrees to repay the loan with three payments of P . The ﬁrst ‘ payment Will be one year after the loan is made. The second payment is 3 years after the loan is made. The last payment is 4 years after the loan is made. Jacqui reinvests each payment at an annual effective rate of 6%. Taking reinvestment into account, Jacqui realizes an annual effective yield of 8%. Calculate P. 2. Ian borrows 10,000. He agrees to make ﬁve semi-annual payments to repay the loan. The amount of the payment will be 2000f where t is measured from the time of the loan. In other words, Ian will pay 1000 at the end of six months, 2000 at the end of one year, 3000 at the end of 1.5 years, 4000 at the end of two years and 5000 at the end of 2.5 years. Determine the annual effective interest rate on Ian’s loan. it}? ‘9 @WQ g ﬂaw} My?) gm? 9 l t aw 39" Q; l/“EW (ﬂ &Q@ m WJQQQQ {ﬁg} @ /ﬂ@m ﬁg? w gong % a “ in ﬂag e gﬂﬂa ﬁﬂﬁﬂ . Issac has opens a new bank account with a deposit of 1000 on January 1, 2012. On February 1, he deposits another 800 into the account. On June 1, he withdraws 1500 to go on vacation. He closes the account on July 31, 2012 by Withdrawing the 375. Using a simple interest approximation, estimate the annual effective interest rate earned by Issac on the bank account. * ) DD 0 4’ 3a? a, ) 5D : W k; are ggwe ?“3i 5 “if [M i» 4% Math 373 Spring 2012 Quiz 2 February 2, 2012 1. Ian borrows 11,000. He agrees to make ﬁve semi—annual payments to repay the loan. The amount of the payment will be 20001‘ Where t is measured from the time of the loan. In other words, Ian will pay 1000 at the end of six months, 2000 at the end of one year, 3000 at the end of 1.5 years, 4000 at the end of two years and 5000 at the end of 2.5 years. Determine the annual effective interest rate on Ian’s loan. (/Qéiyég ﬁg; 05%) .23. 3w? Might? ghee? e? 5) yw ) 3 Va. a Va... . ﬂag . ﬂ 4, A. W it“? ‘ if i m Wj Wan... Mm . Issac has opens a new bank account with a deposit of 1000 on January 1, 2012. On February 1, he deposits another 800 into the account. On June 1, he withdraws 1500 to go on vacation. He closes the account on July 31, 2012 by withdrawing the 390. Using a simple interest approximation, estimate the annual effective interest rate earned by Issac on the bank account. %,,;59QQ sly ggg «Wiggly AW w l g m warm 3‘ m!“ g» l “7 “:3 ) Jacqui loans 2000 to Zac Who agrees to repay the loan with three payments of P . The ﬁrst payment Will be one year after the loan is made. The second payment is 3 years after the loan is made. The last payment is 4 years after the loan is made. Jacqui reinvests each payment at an annual effective rate of 6%. Taking reinvestment into account, Jacqui realizes an annual effective yield of 7%. Calculate P. Math 373 Spring 2012 I Quiz 2 February 2, 2012 l. Issac has opens a new bank account with a deposit of 1000 on January 1, 2012. On February 1, he deposits another 800 into the account. On June 1, he withdraws 1500 to go on vacation. He closes the account on July 31, 2012 by withdrawing the 400. 7 Using a simple interest approximation, estimate the annual effective interest rate earned by Issac on the bank account. E Di? ~52 W? MW g No’j‘é V y a lmwmt gm; “7% 5 ,7 WWW M 3"“ W99 i 2 2. Jacqui loans 2000 to Zac who agrees to repay the loan with three payments of P . The ﬁrst payment will be one year after the loan is made. The second payment is 3 years after the loan is made. The last payment is 4 years after the loan is made. Jacqui reinvests each payment at an annual effective rate of 6%. Taking reinvestment into account, Jacqui realizes an annual effective yield of 7.5%. Calculate P. s 1 s i i Ian borrows 12,000. He agrees to make ﬁve semi-annual payments to repay the loan. The amount of the payment will be 2000f where tis measured from the time of the loan. In other words, Ian Will pay 1000 at the end of six months, 2000 at the end of one year, 3000 at the end of 1.5 years, 4000 at the end of two years and 5000 at the end of 2.5 years. Determine the annual effective interest rate on Ian’s loan. MM? 31200 3%!) WW 3%”? /L'—’ t t I ...
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## This note was uploaded on 03/13/2012 for the course MA 373 taught by Professor Staff during the Fall '08 term at Purdue University-West Lafayette.

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MA373 S12 Quiz 2 Solutions - Math 373 Spring 2012 Quiz 2...

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