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MA373 S13 Homework Chapter 2

# MA373 S13 Homework Chapter 2 - Math 373 Spring 2013...

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January 24, 2013 Math 373 Spring 2013 Homework Chapter 2 Chapter 2, Section 2 1. Bond invests 1000 at an annual effective rate of 6.4%. After T years, Bond as 2500. Determine T . 2. Lindsay loans Jennifer 300 to buy a new iPhone. Jennifer repays the loan after 18 months. The amount that Jennifer pays to Lindsay is 345. Calculate the annual effective rate that Lindsay earned on the loan. 3. Chris deposits 1000 in the bank earning an annual effective interest rate of i . Based on the Rule of 72, Chris believes that he will have 4000 at the end of 24 years. Calculate the amount that Chris will really have at the end of 24 years. 4. Colleen invests 5250 in an account earning an annual effective interest rate of 7.2%. Colleen wants to know when she will have 10,500. Her banker estimates that it will take X years using the Rule of 72. Colleen calculates it exactly and gets Y years. Calculate X Y . Chapter 2, Section 3 5. Victoria is repaying a loan of 2000 with a payment of P at time 1 and another payment of P at tim e 3. The interest rate on Victoria’s loan is 4.6%. Calculate P . 6. Shinji invests 2000 in the bank. At the end of one year Shinji withdraws 1100 from his account. At the end of two years, Shinji closes his account by withdrawing 1050. Calculate the annual effective interest rate earned by Shinji. 7. Dennis borrows 10,000 to be repaid with a payment of 6264.46 at time T and a payment of 6264.46 at time 2 T . The annual effective rate on the loan is 7%. Determine T in months.

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January 24, 2013 8. Matt has 10,000 in his bank account today. Five years ago, he deposited 5000 into his account. Additionally, two years ago, Matt deposited 4000 into his account.
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