extra_problems_1

# extra_problems_1 - 4 572.0 4. Using an interest rate of 7%...

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1. Sue borrows \$2000 on May 21 and repays the loan on Canada Day (July 1). Calculate how much Sue needs to pay assuming exact simple interest with an annual effective rate of interest of 8%. May has 31 days June has 30 days 2000 1 .08 31 21 30 1 365 2017. 97 2. It is known that \$900 invested for two years will earn \$54.81 in interest. Find the accumulated value of \$1000 invested at the same rate of compound interest for 1.5 years. 900 1 i 2 954.81 1 i 954.81 900 1/2 1.03 1000 1.03 1.5 1045.34 3. It is known that \$1000 invested for two and a half years will earn \$90 in interest. Find the accumulated value of \$500 invested at the same rate of simple interest for four years 1000 1 2.5 i 1090 i 90 2.5 1000 0.036 500 1 .036
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Unformatted text preview: 4 572.0 4. Using an interest rate of 7% compounded semiannually, calculate the accumulated value of \$200 after 15 months. 200 1 .07 2 2 15 12 217.96 or i 12 12 1 .07 2 2/12 − 1 .0057500395 200 1.0057500395 15 217.96 5. What rate of interest compounded monthly is equivalent to 6.4% compounded quarterly. i 12 12 1 i 4 4 4/12 − 1 12 1 .064 4 4/12 − 1 6.37% 6. Deb needs \$1500 in one years time. If Deb’s saving account earns a discount rate of 3% compounded monthly, calculate how much she must deposit now to reach her goal. 1500 1 − .03 12 12 1455.61...
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## This note was uploaded on 03/30/2012 for the course ACTSC 231 taught by Professor Chisholm during the Spring '09 term at Waterloo.

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