You invest $5400 for a period of 9 years. At the end of 9 years your investment has grown to $7600. What is the annual rate of return on this investment?

q2- You invest $5400 for a period of 7 years. At the end of 7 years your investment has grown to $7300. What is the annual rate of return on this investment?

q3- You plan to make annual end of year deposits over the next 16 years into a bank account paying 9% p.a., compounding annually. How much do you need to deposit each year in order for the account to contain a future value of $131,000 after 16 years?

q4- What is the monthly payment on a $188,000 mortgage loan, repayable over 22 years, if the interest rate is 12% p.a., compounded monthly?

q5- What is the quarterly payment on a $124,000 mortgage loan, repayable over 21 years, if the interest rate is 12% p.a., compounded quarterly?

3.3

q1- If the number of compounding periods in a year (m) is 1, which will be greater - the APR, the interest rate per compounding period, or the EAR?

q2- If the APR is 11% and interest compounds semi-annually, what is the value of the interest rate per compounding period?

q3- What is the EAR if the APR is 14% and interest compounds semi-annually?

q4- If the expected inflation rate is 2% and the real interest rate is 6%, what is the approximate value of the nominal interest rate?

q5- If the real interest rate is 9% and the expected inflation rate is 5%, what is the exact value of the nominal interest rate?

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