MATH 2600/STAT 2600, Theory of Interest
FALL 2010
Toby Kenney
Homework Sheet 5
Model Solutions
1. A loan of $4,000 at j12 = 8% is amortised with equal monthly payments
for 6 months, with the rst payment in one month.
(a) Calculate the monthly payments.
40
STATISTICS 2060/MATH 2060/ECON 2260 Midterm Test 2.
Friday. Nov. 16. 2012
Please answer the questions in the space provided. JUSTIFY YOUR ANSWERS.
A calculator. and one sheet of formulae/notes, letter size. are permitted.
1. A bivariate probability mass f
MATH 2600/STAT 2600, Theory of Interest
FALL 2014
Toby Kenney
Homework Sheet 1
Due: Thursday 25th September: 11:30 AM
1. Calculate the accumulated value on maturity of the following investments:
(a) $8,000 invested for 18 years at 2.5% eective annual inte
MATH 2600/STAT 2600, Theory of Interest
FALL 2014
Toby Kenney
Homework Sheet 3
Due: Thursday 9th October: 11:30 AM
1. A loan of $25,000 at j4 = 8% is amortised with equal quarterly payments
for 4 years.
(a) Calculate the monthly payments.
(b) Draw up a co
MATH 2600/STAT 2600, Theory of Interest
FALL 2014
Toby Kenney
Homework Sheet 4
Due: Thursday 6th November: 11:30 PM
1. Calculate the price that should be paid for each of the following bonds to
obtain the desired yield:
(a) Face value $150,000, maturing a
MATH 2600/STAT 2600, Theory of Interest
FALL 2013
Toby Kenney
Homework Sheet 6
Due: Thursday 21st November.
1. The current term structure has the following semi-annual yields on zerocoupon bonds:
Term(years)
rate
1
2
1%
1
1.4%
1
12
1.5%
2
2.5%
1
22
2.7%
3
MATH 2600/STAT 2600, Theory of Interest
FALL 2014
Toby Kenney
Homework Sheet 5
Due: Thursday 13th November: 11:30 PM
1. A company are considering a project. The project has the following expected cash ows (all amounts are calculated at the beginning of th
MATH 2600/STAT 2600, Theory of Interest
FALL 2014
Toby Kenney
Homework Sheet 2
Due: Thursday 2nd October: 11:30 AM
1. Mrs. Hall makes a loan of $35,000 at j12 = 4%. The loan is repaid
over 5 years with equal monthly payments. When Mrs. Hall receives
each
MATH 2600/STAT 2600, Theory of Interest
FALL 2013
Toby Kenney
Homework Sheet 7
Due: Thursday 27th November
1. Calculate the modied duration and Macauley duration of a 12-year bond
with semi-annual coupons at coupon rate 8%, if it is purchased for a yield
MATH 2600/STAT 2600, Theory of Interest
FALL 2014
Toby Kenney
Practice Final Examination
This Sample Examination has more questions than the actual nal, in order to cover a wider range of questions. Estimated times are given after each
question to help in
MATH 2600/STAT 2600, Theory of Interest
FALL 2013
Toby Kenney
Homework Sheet 1
Due: Thursday 26th September: 11:30 AM
1. Calculate the accumulated value on maturity of the following investments:
(a) $7,000 invested for 20 years at 2% eective annual intere
MATH 2600/STAT 2600, Theory of Interest
FALL 2013
Toby Kenney
Homework Sheet 4
Due: Thursday 7th November: 11:30 PM
1. Calculate the price that should be paid for each of the following bonds to
obtain the desired yield:
(a) Face value $100,000, maturing a
MATH 2600/STAT 2600, Theory of Interest
FALL 2013
Toby Kenney
Homework Sheet 6
Due: Thursday 21st November.
1. The current term structure has the following semi-annual yields on zerocoupon bonds:
Term(years)
rate
1
2
3%
1
3%
11
2
3.5%
2
4.5%
21
2
5%
3
5.6
MATH 2600/STAT 2600, Theory of Interest
FALL 2013
Toby Kenney
Homework Sheet 5
Due: Thursday 14th November: 11:30 PM
1. A company are considering a project. The project has the following expected cash ows (all amounts are calculated at the beginning of th
MATH 2600/STAT 2600, Theory of Interest
FALL 2013
Toby Kenney
Homework Sheet 2
Due: Thursday 3rd October: 11:30 AM
1. Mr. Irving invests $300 a month at j12 = 5% into a fund for his granddaughters education. How much is in the fund when she starts univers
MATH 2600/STAT 2600, Theory of Interest
FALL 2013
Toby Kenney
Homework Sheet 3
Due: Thursday 10th October: 11:30 AM
1. A loan of $15,000 at j12 = 10% is amortised with equal monthly payments
for 2 years.
(a) Calculate the monthly payments.
(b) Draw up a c
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MATH 2600/STAT 2600, Theory of Interest
FALL 2014
Toby Kenney
Practice Final Examination
Model Solutions
1. Calculate the price that should be paid for each of the following bonds to
obtain the desired yield:
(a) Face value $70,000, maturing at par in 12
MATH 2600/STAT 2600, Theory of Interest
FALL 2013
Toby Kenney
Midterm Examination
Model Solutions
1. Mr. Almon receives an invoice for $4,000, for payment within 50 days.
He can get a 2% discount if he pays within the rst 10 days. What is the
largest rate
MATH 2600/STAT 2600, Theory of Interest
FALL 2010
Toby Kenney
Midterm examination. Model Solutions
1. An investor has a promissory note for $3,000 in 150 days at 5% simple
interest. After 40 days, she sells it to a bank which discounts notes at
4.8%
(a) H
MATH 2600/STAT 2600, Theory of Interest
FALL 2010
Toby Kenney
Midterm Examination
Thursday 4th November, 11:30 13:00
Scientic calculators permitted; programable calculators must have
memory wiped; nancial calculators not permitted.
1. An investor has a pr
MATH 2600/STAT 2600, Theory of Interest
FALL 2010
Toby Kenney
Homework Sheet 7
Model Solutions
1. A machine has a current cost of $40,000. The machine has an expected
lifetime of 20 years. It cannot be resold when it is nished with. The
maintainance costs
MATH 2600/STAT 2600, Theory of Interest
FALL 2010
Toby Kenney
Homework Sheet 6
Model Solutions
1. Calculate the price that should be paid for each of the following bonds to
obtain the desired yield:
(a) face value $5,000, maturing at par in 15 years, coup
MATH 2600/STAT 2600, Theory of Interest
FALL 2010
Toby Kenney
Homework Sheet 2
Due: Thursday 7th October: 1:00 PM
1. Calculate the accumulated value on maturity of $1,000 invested for 23
years at 5% interest compounded:
(a) annually.
1000(1.05)23 = 3071.5
MATH 2600/STAT 2600, Theory of Interest
FALL 2010
Toby Kenney
Homework Sheet 3
Due: Thursday 14th October: 1:00 PM
1. Ms. Jones invests $500 a month in her pension plan, which pays interest at
j12 = 5%. She makes her rst investment on her 21st bithday. Ho
MATH 2600/STAT 2600, Theory of Interest
FALL 2010
Toby Kenney
Homework Sheet 4
Model Solutions
1. John makes a deposit of $2,000 at the end of every year into an account
that pays interest at j12 = 5%. How much is in the account at the end of
12 years?
j1
MATH 2600/STAT 2600, Theory of Interest
FALL 2010
Toby Kenney
Homework Sheet 1
Due: Thursday 30th September: 1:00 PM
1. Calculate the accumulated value on maturity of the following investments:
(a) $1,000 invested for 3 months at 5% simple interest.
1000
MATH 2600/STAT 2600, Theory of Interest
FALL 2014
Toby Kenney
Homework Sheet 1
Model Solutions
1. Calculate the accumulated value on maturity of the following investments:
(a) $8,000 invested for 18 years at 2.5% eective annual interest.
8000(1.025)18 = 1
MATH 2600/STAT 2600, Theory of Interest
FALL 2014
Toby Kenney
Homework Sheet 3
Model Solutions
1. A loan of $25,000 at j4 = 8% is amortised with equal quarterly payments
for 4 years.
(a) Calculate the quarterly payments. [Note: In the original version of
MATH 2600/STAT 2600, Theory of Interest
FALL 2014
Toby Kenney
Homework Sheet 4
Model Solutions
1. Calculate the price that should be paid for each of the following bonds to
obtain the desired yield:
(a) Face value $150,000, maturing at par in 8 years, cou