Sample Exam 4
How much should be invested into an account that pays 6.3% compounded monthly in order to be able to make
annual payments of $6,500 beginning one year from now?
A=R/(1+i)^n-1| 6500/1.052
Sara Bresnehan
Math of Finance
Assignment 13
1. How much should you invest in an account which pays 4.8% compounded monthly in order to
provide a scholarship of $7,500 every six months beginning now?
Sara Bresnehan
Math of Finance
Assignment 14
1. An asset costing $32,000 has a useful life of five years at which time it can be sold for $7,000.
Compute the net present value of the depreciation char
How much should an individual request in order to have the use of 6,000 for 7 months based on a discount rate of 8%?
B = P/1-dt| 6000/1-.08*7/12 = 6,293.71
If you borrow 16,000 for 10 months at discou
Sara Bresnehan
Math of Finance
Assignment 15
1. A large company purchases a tract of land for $350,000. The investment is expected to produce
$60,000 over costs for the next ten years at which time it
Sara Bresnehan
Math of Finance
Assignment 13
1. How much should you invest in an account which pays 4.8% compounded monthly in order to
provide a scholarship of $7,500 every six months beginning now?
Sara Bresnehan
Math of Finance
Assignment 12
1.
i = .12/4 = .03
8,000 * (.03/(1-.03^-8) = 1139.65 = $1140 is the monthly payment rounded to the nearest
dollar.
8,000 * 1.03^8 1140 (1.03^7-1)/.03) * 1.
Sara Bresnehan
Math of Finance
Assignment 7
1. P = S * e^-r*t
S = 5,000, r = .13, t = 208/360
=5,000*e^-.13*(208/360)
= $4638.20
$4638.20 is the present value of this debt on March 21 st.
2. x = $10,0
You invest 13,000 in an account which pays interest compounded monthly. After two and one
half years, the balance in the account was 15,907.15. Find the nominal interest rate.
S=P(1+i)^c; P=13,000; S=
The winner of a lottery is paid $25,000 each quarter for twenty years beginning now. What is the amount won if the interest
rate is 3.8% compounded continuously?
i = e^r*t -1/ i_q=e^.038/4 1 = 0.00954
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
How much should an individual request in order to have the use of 6,000 for 7 months based on a
discount rate of 8%
B=P/1-dt; B=6,000/1-.08(7/12) = 6293.
Sara Bresnehan
Math of Finance
Assignment # 2
1. P = 16,500; r = .16
Approximate time = 154 days; Exact time = 156 days
Ordinary interest = 360 days; Exact interest = 366 days (leap year)
a) exact tim
Sara Bresnehan
Math of Finance
Lesson 4
1. S =P(1+ rt)^c = P(1 + i)^c
P = 8,000; r = .039; c =4;
i = rt = .039/2 and c = 2 * 4 = 8 so S = 8,000 * 1.0195^8
S = $9,336.58 balance after 4 years
2.
a. i =
Sara Bresnehan
Math of Finance
Assignment #9
1. Interest more frequent then payments
S = R (1 +iy)^right number -1 )/i
im= 0.096/12 = 0.008; the right number = 6; is=1.008^6 1 = 0.04897030163
15,000 =
Sara Bresnehan
Math of Finance
Lesson 1 Assignment 1
1. I = Prt
I = 3200(.069)(5/12)
I= 92
$1500 92 = $1408 is applied to the principal.
2. P = S/1+rt
P = 675.80/1+0.018 * 5
P = 620
$620 was borrowed.
Sara Bresnehan
Math of Finance
Assignment #8
1. R = 250, i = .041/4 = 0.01025, n = 8.5 * 4 = 34
S36 = S36|0.01025 = 250 * (1.01025^34-1/0.01025) = $10,108.03
$10,108.03 will be the balance in the acco