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Mathematics Of Business And Finance 4th Edition Larry Daisley, Thambyrajah Kugathasan, Diane Huysmans - Solutions
A father invested $125,000 at 4.8% compounded monthly so that his son and his daughter, aged 10 and 12, respectively, will receive equal amounts from this fund when each of them reach the age of AppendixLO1
If money earns 6.26% compounded daily, what two equal payments, one today and the other in one year, would be equivalent to:a. $550 today and $680 in 180 days?b. Two equal payments of $5000: one due one year ago, but not paid, and the other due today?AppendixLO1
If money earns 4% compounded semi-annually, what two equal payments, one in one year and the other in three years, would be equivalent to:a. $8000 today?b. $5650 due one year ago, but not paid, and $6800 due two years ago, but not paid?AppendixLO1
Jeremy had an agreement to repay payments of $6500 in four years and $11,225 in seven years. How much should he pay in five years in order to clear the debt if an interest rate of 5% compounded quarterly was charged?AppendixLO1
What single payment in one year would be equivalent to $60,500 three years ago, but not paid, and $12,025 in four years? Assume an interest rate of 12% compounded monthly.AppendixLO1
You had an agreement to pay $6070 in 300 days and $10,500 in 500 days. What single payment 200 days earlier than the first scheduled payment would pay off this debt? Assume that money earns 3% compounded daily.AppendixLO1
You are expected to settle a loan by making payments of $1200 in 180 days, $1560 in 365 days, and $3200 in 545 days. What single payment in 365 days would be equivalent to these scheduled payments if money is worth 6% compounded daily?AppendixLO1
What single payment today would replace a payment of $5000 in one year and $8000 in two years if the interest rate is 4% compounded monthly?AppendixLO1
Calculate the single equivalent payment today that would replace three payments of $18,400, $21,065, and $12,560, in two years, four years, and five years, respectively, if money is earning interest at a rate of 3% compounded monthly.AppendixLO1
What single payment in two years would replace a payment of $18,650 due one year ago and a payment of $21,400 due two years and two months ago? Assume that both payments were not paid and that the interest rate is 4% compounded quarterly.AppendixLO1
Mirza Industries was supposed to receive payments of $10,000 two years ago and $20,000 one year ago from a customer who could not make either payment as scheduled. If the customer would like to settle both payments today, what total amount would he have to pay Mirza Industries if an interest of 8%
If money earns 8.5% compounded monthly, what single payment in one year would be equivalent to:a. $2340 due two years ago, but not paid, and $500 today?b. $880 due two years ago, but not paid, and $850 in five years? Show your calculation with a timeline diagram, choosing one year from now as the
If money earns 6.25% compounded semi-annually, what single payment today would be equivalent to:a. $300 in two years and $780 in four years?b. $8020 due six months ago, but not paid, and $9050 in one year? Show your calculation with a timeline diagram, choosing today as the focal date.AppendixLO1
Jada obtained a loan from a credit union. The maturity value of the six-year term loan is $38,955.50. She was charged an interest rate of 2.41% compounded annually in the first 2 years of the loan, 2.62% compounded semi-annually in the next two years, and 2.95% compounded monthly in the last two
The maturity value of Sanjay's loan at the end of a five-year term is $41,442.39. If he was charged an interest rate of 2.66% compounded monthly in the first year of the loan, 2.19% compounded annually in the next two years, and 3.15% compounded semi-annually in the last two years, what was the
A bank offered a personal loan to Eduardo at an interest rate of 6.5% compounded semi-annually for two years. At the end of the period, if the amount of interest charged was $880.50, calculate the present value of the loan.AppendixLO1
The interest charged on a personal loan for two years was $2450.75. If the interest rate charged on the loan was 5.95% compounded daily, calculate the present value of the loan.AppendixLO1
Which option should Summit Media choose to invest its savings and why? Option A: 5.02% compounded daily. Option B: 5.50% compounded semi-annually. (Hint: Assume either a future value or present value and a time period.)AppendixLO1
Tao learned that he could save his money in a term deposit. Which ten-year term deposit should he choose if one is providing him with an interest rate of 6% compounded quarterly, and the other 6.5% compounded monthly?AppendixLO1
Karen has the following two options to receive a loan payment: Option A: Receiving the payment of $5000 today, or Option B: Receiving payments of $3000 today and $2250 one year later. If money is worth 3.45% compounded semi-annually, which option is more economical for her and by how
A company has the following payment options to settle a loan: Option A: To pay $19,000 today, or Option B: To pay $10,000 today and $9500 in one year. If money earns 4% compounded daily, which option is more economical for the company and by how much?AppendixLO1
An amount of $30,500 is due to be paid on October 12, 2018. What equivalent payment should be made on August 16, 2016 to settle this amount, if money is worth 4.5% compounded daily?AppendixLO1
What payment made on April 15, 2018 would be economically equivalent to a payment of $25,485 to be made on August 10, 2020, if money earns 5.75% compounded daily?AppendixLO1
A loan accumulated to $25,050 in ten years at 5.5% compounded monthly. If this loan had been issued at 5.48% compounded quarterly instead of 5.5% compounded monthly, would there have been any savings?AppendixLO1
It was time for Bolder Cans Ltd. to repay its accumulated debt of $83,232. The original amount was received from a high net-worth individual at 5% compounded quarterly for five years. How much would have been saved if the loan had been received at 5% compounded semi-annually?AppendixLO1
Rohan purchased a GIC that has a maturity value of $32,755 in 7 years and 5 months. What was the purchase price of the GIC if it earns 3.5% compounded quarterly?AppendixLO1
Azra purchased a GIC that has a maturity value of $25,865 in 6 years and 4 months. What was the purchase price of the GIC if it earns 2.5% compounded quarterly?AppendixLO1
What is the discounted value of a loan that matured to $5000 in 5 years if the interest rate is 4% compounded monthly?AppendixLO1
What amount deposited today would yield $50,000 in 4 years and 5 months if it were invested at 5.55% compounded semi-annually?AppendixLO1
Olivia borrowed money to renovate her kitchen. She settled the loan in five years with a single payment of $55,021.80. If the interest rate charged on the loan was 3.8% compounded semi-annually for the first two years and 4.2% compounded monthly for the next three years, calculate the amount
The money that Paulina invested in a mutual fund for four years matured to $20,961.47. If the fund was growing at 4.6% compounded semi-annually for the first year and 4.5% compounded monthly for the next three years, calculate the amount invested and the amount of interest earned from this
A law firm invested its net profit into an investment fund that provided an initial interest rate of 4.55% compounded monthly. After six months, there was a boom in the market and the interest rate rose to 8.75% compounded monthly. If the accumulated value one year after the boom was $480,000,
Chetan's investment in a Registered Retirement Savings Plan (RRSP) at an interest rate of 4.35% compounded semi- annually had grown to $24,000 at the end of one year. Thereafter, the interest rate on his RRSP dropped to 3.75% compounded monthly and remained constant for the next two years.
What amount invested today will amount to $13,695.13 in two years if the interest rate is 4.2% compounded monthly for the first year and 5% compounded daily for the second year?AppendixLO1
What amount invested today will accumulate to $18,613.77 in two years if the interest rate is 2.19% compounded daily during the first year and 4% compounded semi-annually during the second year?AppendixLO1
The interest rate on a Guaranteed Investment Certificate (GIC) is 3.5% compounded daily. What was the purchase price if it has a maturity value of $38,430 in 300 days?AppendixLO1
John's goal is to have $50,000 in ten years. His current bank offers him an interest rate of 4% compounded semi-annually on his investments for the ten year period. What should he invest today in order to realize his goal?AppendixLO1
Boaz wishes to have $20,800 saved in five years to use as a deposit for the purchase of a new home. How much money should he invest today at 3.25% compounded semi-annually in order to achieve this goal?AppendixLO1
How much interest did Speedy Movers pay for a debt that accumulated to $58,556 in four years if the interest rate charged was 4.5% compounded quarterly?AppendixLO1
Cheryl would like to accumulate $35,000 for her retirement in 10 years. If she is promised 4.75% compounded annually by her local bank, how much should she invest today?AppendixLO1
If you wish to have $100,000 in five years, how much should you invest in an investment fund that earns 3.75% compounded annually?AppendixLO1
Westcoast Machinery received a demand loan of $180,000. It repaid $75,000 at the end of the first year, $80,000 at the end of the second year, and the balance at the end of the third year. If the interest rate charged was 5.5% compounded semi-annually for the first year, 5.25% compounded quarterly
A medical equipment manufacturer received a loan of $285,000 from a Canadian financial institution. It repaid $50,000 in one year, $110,000 in two years, and the balance in three years. If the financial institution charged an interest rate of 7% compounded monthly for the first year, 6.5%
Two years ago, Svetlana wanted to purchase equipment worth $33,500 for her printing business. In order to get this done, she made a down payment of $3500 and took the remaining amount as a loan. She made the commitment to pay back the loan in five years. She was charged an interest rate of 2.38%
One year ago, Raha took a loan of $28,000 to purchase a car. She is expected to pay back the loan in 6 years at an interest rate of 2.15% compounded semi-annually in the first year, 2.45% compounded monthly in the next two years, and 2.85% compounded annually for the remaining three years. How much
Victor plans to invest $100,000 in a GIC for three years. A bank offers an increasing rate of interest on its three-year GICs that pay semi-annual compounded rates of 2.25%, 2.75%, and 3.25%, respectively, in each of the successive years. On the other hand, a trust company offers GICs that pay
Prem wanted to invest $80,000 in a GIC for three years. A bank offers an increasing rate of interest on its three-year GICs that pay semi-annual compounded rates of 2.75 %, 3.00 %, and 3.25%, respectively, in each of the successive years. A trust company offers GICs that pay 3.00% compounded
Top Tier Talent Inc., a successful recruitment agency in Montreal, loaned $30,000 to one of its partners for five years. If the interest rate for the first two years was 2% compounded monthly and for the next three years was 2.3% compounded semi-annually, how much should the partner repay the
Cassie, an investment banker, took a risk and invested $350,000 in a fund that yielded 6.75% compounded daily. After one year, the rate dropped to 2.25% compounded monthly. What will be the accumulated amount in the fund at the end of 1 year and 8 months?AppendixLO1
Calculate the maturity value and the interest earned on an investment of $12,000 for four years if it was growing at 3.25% compounded semi-annually during the first year and 3.6% compounded monthly during the next three years.AppendixLO1
Marcia invested $25,000 at 4.5% compounded monthly for the first two years and at 5% compounded daily for the third year. What is the maturity value of her investment and the amount of interest earned at the end of three years?AppendixLO1
On May 16, 2015, Jonah invested $30,000 in a fund that was growing at 3.75% compounded semi-annually. On April 27, 2016, the interest rate on the fund changed to 4.25% compounded monthly and remained constant thereafter. What will be the accumulated value of the fund on August 29, 2020?AppendixLO1
On April 11, 2015, Cynthia received a loan of $45,000 at 5.55% compounded monthly. On May 13, 2016, the interest rate on the loan changed to 5.75% compounded quarterly and remained constant thereafter. What was the accumulated value of the loan on December 31, 2019?AppendixLO1
Arman loaned $250,000 to a small business at 7.75% compounded semi-annually for 1 year and 2 months.a. How much would the business have to repay Arman at the end of the period?b. How much interest did Arman earn from this investment?AppendixLO1
Power Printers received a loan of $25,000 from a bank at 5.15% compounded quarterly for 1 year and 5 months. Calculate the accumulated amount and the interest charged on this loan.AppendixLO1
Naoki received a personal loan from his local bank at an interest rate of 6.75% compounded semi-annually for one year. If the amount of interest charged at the end of the period was $280.50, calculate the accumulated value of the loan.AppendixLO1
The interest charged on a student loan that Harman obtained from a bank for four years was $1855. If the bank charged an interest rate of 4.35% compounded monthly, calculate the accumulated value of the loan at the end of the period.AppendixLO1
Viper Communications borrowed $20,000 for two years and six months at 5.5% compounded semi-annually.a. Calculate the accumulated value of the debt at the end of the time period.b. If the corporation kept the money for another two months (at the same interest rate), calculate the total repayment
Lee's real estate agency borrowed $10,000 from a credit union at 6.55% compounded monthly for 6 years and 9 months.a. How much should Lee's agency repay the credit union at the end of the time period?b. If the agency kept the money for another three months (at the same interest rate), calculate the
Dylan invested his company's annual profits of $20,000 in an investment fund earning 4.75% compounded monthly. Next year, his company had a very profitable year, and he invested his company's profits of $32,000 in the same fund. What is the balance of the fund at the end of four years (three years
What is the accumulated value 500 days from now of $8000 invested today and $12,000 invested 180 days from now in a fund earning 3% compounded daily?AppendixLO1
Aubrey deposited $25,000 in her bank savings account that earns 2% compounded daily. At the end of one year, she deposited an additional $18,000 into this account. What was the balance in her account at the end of 450 days?AppendixLO1
A publishing company invested $50,000 in an investment fund that was growing at a rate of 4% compounded monthly. After one year, the company deposited an additional $30,000 in the same fund. Calculate the balance in the fund at the end of three years (two years after the additional
How much more or less interest would you earn by investing $10,000 for six years at 5% compounded annually rather than at 5% p.a. simple interest?AppendixLO1
How much more or less interest would you earn by investing $5850 for three months at 4% compounded semi-annually rather than at 4% p.a. simple interest?AppendixLO1
The simple interest charged on a loan for two years at 4% p.a. is $375. Determine the compound interest amount on this loan for two years at 4% compounded quarterly.AppendixLO1
The simple interest earned on an investment for one year at 5% p.a. is $250. Calculate the compound interest amount earned on the same amount for one year at 5% compounded daily.AppendixLO1
Monobotics Inc. wants to invest its net profits to gain the highest returns. Which of the following two options will yield the highest returns? (Hint: Assume $1000 for the present value and one year for the time period.) Show your calculations to support your answer. Option A: A credit union that
Roy was offered a choice between two interest rates for a loan: 5.13% compounded daily or 5.14% compounded monthly. Which one should he choose? (Hint: Assume $1000 for the present value and one year for the time period.) Show your calculations to support your answer.AppendixLO1
If Shanta deposited $2800 in an investment fund that was earning 5.5% compounded semi-annually for a period of three years, calculate the accumulated value of the investment and the interest earned during the period.AppendixLO1
Flower Folk Florists received a loan of $7000 at 5.25% compounded daily. Calculate the accumulated value of the loan and the interest charged at the end of 200 days.AppendixLO1
Ada borrowed $3000 at 4.75% compounded annually. She repaid the loan in four years. Calculate the accumulated value of the loan at the end of the term and the interest charged during the period.AppendixLO1
Ashton invested $8450 for five years in his savings account that was earning 3.2% compounded annually. Calculate the future value of his investment at the end of the term and the amount of interest earned during the period.AppendixLO1
Calculate the nominal interest rate of a loan that has 16 compounding periods over four years and a periodic interest rate of 0.5%.AppendixLO1
George deposits his money for nine years in a savings account that has a periodic interest rate of 1.1%. Calculate the nominal interest rate of the account if there are 18 compounding periods during the period of investment.AppendixLO1
The periodic interest rate and nominal interest rate of a loan are 2.25% and 4.5%, respectively. Calculate the number of compounding periods if the loan is held for a period of 8 years.AppendixLO1
Ramya deposits her savings in an investment that has nominal and periodic interest rates of 4.48% and 2.24%, respectively. If her investment was for a period of two years, what will be the number of compounding periods in the term?AppendixLO1
Lila receives a personal loan that has 66 compoundings in a time period of 16 years and 6 months. Calculate the compounding frequency of the loan.AppendixLO1
If Vien invested money for 1 year and 3 months in a low-risk investment vehicle that had 15 compounding periods over the term, calculate the compounding frequency of the investment.AppendixLO1
Latisha's investment has a time period of 3 years and 8 months and a monthly compounding frequency. Calculate the number of compounding periods during the term of her investment.AppendixLO1
Jonathan received a mortgage that was compounded semi-annually for a period of 15 years. Calculate the number of compounding periods during the term of this mortgage.AppendixLO1
If the nominal interest rate of an investment is 5% and the periodic interest rate is 1.25%, calculate the compounding frequency.AppendixLO1
If Rose invested her savings in a bank account that offered her a nominal interest rate of 2.86% and a periodic interest rate of 1.43%, what was the compounding frequency used?AppendixLO1
A bank released a new credit card that charges interest at a rate of 1.35% p.m. Calculate the nominal interest rate compounded monthly for the credit card.AppendixLO1
Calculate the nominal interest rate compounded monthly for a credit card that has a periodic interest rate of 1.1% p.m.AppendixLO1
A loan of $190,000 was settled in seven years with payments of $8000 at the end of every three months.a. What nominal interest rate compounded monthly was charged on the loan?b. At this rate (use the full un-rounded interest rate), what month-end payments would have settled the loan in five
Tia has $35,000 in an RRSP that is growing at 3.6% compounded monthly. She wants to withdraw $650 at the beginning of every month from this RRSP. After how many withdrawals will the fund be completely depleted?AppendixLO1
Bella obtained a loan of $50,000 at 3.6% compounded monthly. How long (in years and months) will it take to settle the loan with month-end payments of $500?AppendixLO1
How many more payments would be required to be able to accumulate at least $200,000 by saving $1500 at the end of every three months instead of $1500 at the beginning of every month? Assume an interest rate of 6% compounded quarterly.AppendixLO1
The interest rate on a five-year, $100,000 loan is 4% compounded daily. Calculate the amount of interest saved if the loan was settled with month-end payments in three years instead of month-end payments in five years.AppendixLO1
Nuben obtained a business loan of $300,000 at 4.5% compounded semi-annually.a. What is the size of the semi-annual payments to be made over 20 years in order to pay off the loan?b. Calculate the amount of interest paid on the loan.AppendixLO1
A savings account is earning 3.5% compounded semi- annually. How long (in years and months) would it take to save at least $50,000 by making month-end deposits of $500?AppendixLO1
Vikram withdraws $1000 from his retirement account at the beginning of each month for 10 years and $1500 at the beginning of each month for the next 5 years. After 15 years, his retirement account is depleted. If the money in his retirement account earns 4% compounded annually, how much retirement
How much more money should be deposited at the end of every month to accumulate $50,000 in ten years at 6.2% compounded quarterly instead of 6.2% compounded monthly?AppendixLO1
How much more money should be invested now in order to receive $900 at the beginning of each month for ten months instead of $300 at the beginning of each month for 30 months? Assume an interest rate of 6% compounded semi-annually.AppendixLO1
Ritu paid off her student loan in five years by making payments of $750 at the beginning of every month. If the interest rate on her loan was 6% compounded monthly, calculate the size of the original loan and the amount of interest paid on the loan.AppendixLO1
Atif plans to retire on his 40th birthday. He has been saving $1200 every month since his 22nd birthday in a fund that earns 7.5% compounded annually. What would the balance be in the fund on his 40th birthday, assuming that he did not make any investment on his 40th birthday? What was his
A 20-year loan is amortized by payments of $1200 made at the end of each month. If the interest rate is 4% compounded semi-annually, what is the loan principal?AppendixLO1
Hurd Corporation wants to save $10,000 at the end of every year for five years. Bank A offers an interest rate of 6% compounded daily and Bank B offers an interest rate of 6% compounded monthly. Hurd Corporation is considering the following two options: Option A: Save $4000 annually in Bank A and
Ashwin won a lottery and must decide among the following options: Option A: $50,000 cash today. Option B: $1250 at the end of every 3 months for 20 years. Option C: $400 at the end of every month for 20 years. If money is worth 9% compounded annually, calculate the present value of each option.
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