Introduction to Interest Theory for Actuarial Science
MATH 285

Fall 2014
Name _
11/26/14
Worksheet 8 Chapter 7, Sections 1 through 5. To be worked on in class 11/16/14 and at home and
turned in on Tuesday, December 2, 2103.
1.
(7.2) Find the effective rate which a 6year 8% bond must earn for years 7 through 10 to be
equivalen
Introduction to Interest Theory for Actuarial Science
MATH 285

Fall 2014
Math 285 Introduction to Interest Practice Problems for the Final Exam Fall 2014 (Miervaldis)
1. In how many years will $1500 accumulate to $2000 at 6% interest compounded quarterly?
2. How much interest is earned in the fifth year by $1000 invested under
Introduction to Interest Theory for Actuarial Science
MATH 285

Fall 2014
For the first inclass worksheet, we worked a problem similar to this:
Find the accumulated value of $7500 at the end of 6 years and 5 months invested at 8% per annum.
Assume simple interest during the final payment.
(6
5
5
) = 7500 (1.08)6 (1 + ( ) (0.0
Introduction to Interest Theory for Actuarial Science
MATH 285

Fall 2014
Review problems Test 2, Math 285
1. You have bought a 2015 Honda Accord 1for $32,000. The bank has given you a 36 month loan
with an APR of 3%.
a. What is your monthly payment? .
b. Set up an amortization table for the first 3 months of payments.
c. What
Introduction to Interest Theory for Actuarial Science
MATH 285

Fall 2014
Math 285
Practice problems for Midterm 1
Although many of the problems presented here use annual interest rates, be prepared to use
compounded interest rates on the test.
1. In how many years will $500 accumulate to $800 at 6% simple interest?
2. How much
Introduction to Interest Theory for Actuarial Science
MATH 285

Fall 2014
Review problems Test 2, Math 285
1.
You have bought a 2015 Honda Accord for $32,000. The bank has given you a 36 month loan
with an APR of 3%.
a. What is your monthly payment?
b. Set up an amortization table for the first 3 months of payments.
c. What is