Questions and Answers of Fundamentals of Business Mathematics in Canada

A five-year loan of $20,000 at 4.8% compounded quarterly requires monthly payments. a. Calculate the interest component of Payment 47. b. Calculate the principal component of Payment
A $200,000 mortgage loan at 6.6% compounded semiannually has a 25-year amortization period.a. Calculate the monthly paymentb. If the interest rate were 1% lower (that is, 5.6% compounded
A $165,000 mortgage loan at 4.8% compounded monthly requires monthly payments during its 25-year amortization period. a. Calculate the monthly payments rounded to the cent. b. Calculate the
The Switzers are nearing the end of the first five-year term of a $200,000 mortgage loan with a 25-year amortization. The interest rate has been 6.5% compounded semiannually for the initial term. How
The Melnyks are nearing the end of the first three-year term of a $250,000 mortgage loan with a 20-year amortization. The interest rate has been 6.7% compounded semiannually for the initial term. How
Welland Fabricating borrowed $38,000 at 8% compounded quarterly to purchase a new piece of machinery. Payments of $4000 are made at the end of every quarter.a. Calculate the balance at the end of two
Quarterly payments of $3000 are required on an $80,000 loan at 6.0% compounded quarterly.a. Calculate the interest component of Payment 30.b. Calculate the principal component of Payment 9. c.
The interest rate for the fast three years of an $280,000 mortgage loan is 4.8% compounded semiannually. Monthly payments are calculated using a 25-year amortization.a. What will be the principal
An annuity providing a rate of return of 3.9% compounded monthly was purchased for $45,000. The annuity pays $400 at the end of each month.a. How much of Payment 37 will be interest?b. What will be
Rye years ago, Ms. Holliday received a mortgage loan from Scotiabank for $260,000 at 6.8% compounded semiannually for a five-year term. Monthly payments were based on a 25-year amortization. The bank
The interest rate for the first five gears of a $265,000 mortgage loan is 4.25% compounded semiannually. Monthly payments are calculated using a 20-year amortization.a. What will be the principal
Jean and Walter Pereira financed the addition of a swimming pool using a $24,000 home improvement loan from their bank. Monthly payments were based on an interest rate of 5.2% compounded semiannually
A $190,000 mortgage loan charges interest at 6.6% compounded monthly for a four-year term. Monthly payments were calculated for a 15-year amortization and then rounded up to the next-higher $10.a.
The interest rate for the first five years of a $187,000 mortgage loan was 7.25% compounded semiannually. The monthly payments computed for a 15-year amortization were rounded to the next-higher
Madeline obtained a $225,000 mortgage at 5.25% compounded semiannually for a five year term. Monthly payments are calculated using a 25-gear amortization. At the outset, Madeline decided to round up
Trent borrowed $18,000, which he will repay with quarterly payments of $1000, and a final, smaller payment. The interest rate on the loan is 6% compounded monthly. How much interest will Trent pay
The Delgados have a gross monthly income of $6000. Monthly payments on personal loans total $500. Their bank limits the gross debt service ratio at 33% and the total debt service ratio at 42%.a.
Through persuasive negotiation, Russ has obtained an interest rate of 4.8% compounded semiannually for tl1e first five-year term of his mortgage, ratl1er than the 5.1% compounded semiannually the
A $25,000 home improvement (mortgage) Joan charges interest at 6.6% compounded monthly for a three-year term. Monthly payments are based on a 10-year amortization and rounded up to the next $10.a.
An annuity providing a rate of return of 5.6% compounded quarterly was purchased for $25,000. The annuity pays $800 at the end of each quarter (except for a smaller, final payment).a. How much of the
The interest rate for the first five years of a $280,000 mortgage is 4.8% compounded semiannually. Monthly payments are based on a 25-year amortization. lf a $5000 prepayment is made at the end of
Golden Dragon Restaurant obtained a $9000 loan at 5% compounded annually to replace some kitchen equipment. Prepare a complete amortization schedule if payments of $1800 (except for a smaller, final
A $200,000 mortgage at 4.9% compounded semiannually with a 25-year amortization requires monthly payments. The mortgage entitles the borrower to increase the amount of the regular payment by up to
The interest rate for the first three years of a $163,000 mortgage is 5.4% compounded semiannually. Monthly payments are based on a 20.year amortization. lf a $4000 prepayment is made at the end of
Valley Produce received $50,000 in vendor financing at 3.8% compounded semiannually for the purchase of harvesting machinery. The contract requires annual payments of $10,000 (except for a smaller,
An annuity paying $1400 at the end of each month (except for a smaller final payment) was purchased with $225,000 that had accumulated in an RRSP. The annuity provides a semiannually compounded rate
After two years of the first five-year term at 6.7% compounded semiannually, Dan and Laurel decide to take advantage of the privilege of increasing the payments on their $210,000 mortgage loan by
Ms. Esperanto obtained a $40,000 hon1e equity loan at 4.5% compounded monthly.a. What will she pay monthly if the amortization period is 15 years?b. How much of the payment made at the end of the
Monthly payments on a $150,000 mortgage are based on an interest rate of 4.9% compounded semiannually and a 30-year amortization. If a $5000 prepayment is made along with the 32nd payment,a. How much
A mortgage contract for $245,000 written 10 years ago is just at the end of its second five-year term. The interest rates were 6% compounded semiannually for the first term and 5% compounded
Jean and Walter Pereira financed the addition of a swimming pool using a $24,000 home improvement loan from their bank. Monthly payments of $500 (except for a smaller, final payment) include interest
Elkford Logging's bank will fix the interest rate on a $60,000 loan at 4.2% compounded monthly for the first four-year term of an eight-year amortization period. Monthly payments are required on the
Christina has just borrowed $12,000 at 7% compounded semiannually. Since she expects to receive a $10,000 inheritance in two years when she turns 25, she has arranged with her credit union to make
The MacLellans originally chose to make payments of $2600 per month on a $275,000 mortgage written at 7.4% compounded semiannually for the first five years. After three years they exercised their
Mortgage Payoff Chart To access this chart, go to the Student Edition of the textbook's Connect. In the navigation bar, select "Chapter 13" in the drop-down box. In the list of resources for Chapter
Sabine owns and operates a part-time pet grooming business. She charges a flat rate of $40 to bathe and groom a dog. Last year, Sabine groomed 384 dogs. Her total costs were $4848, which included
Eight months ago, Louise agreed to pay Thelma $750 and $950, six and 12 months respectively from the date of the agreement. With each payment, Louise agreed to pay interest on the respective
Rashmi has the option of settling a debt by paying $5230 today, or waiting exactly 5 months and paying $5500.a. If her money can earn 8.2% per annum, which option should she choose?b. If her money
A hockey league requires parents to pay $500 on September 1 for the year's league fees, and an additional $250 fee on December 15 of the same year to cover costs associated with an annual. Christmas
If $3702.40 earned $212.45 interest from September 17, 2016 to March 11, 2017, what rate of interest was earned?
What amount paid on September 24 is equivalent to $1000 paid on the following December 1 if money can earn 3%?
Maclean borrowed $17,450 at a rate of 6.25% 285 days ago. What payment made today will settle the debt?
A national "big box" retailer is able to purchase automotive tires directly from the manufacturer. The retailer pays $172.35 for a performance tire that lists for $382.99. A small local tire shop
Morgan is planning to run a small lawn care business this summer. He can rent a tide-on lawn tractor for $680 per month. He estimates that it will cost $5 in gasoline to cut the average lawn, and he
Emma is launching a home-based business. She intends to make and sell gluten-free desserts. Emma has identified the following cost categories for her business. For each cost category, identify
A small business calculates that its monthly fixed costs are $3,200. If the business calculates its contribution rate to be 0.42, what level of monthly sales must be generated in order to break even?
Sri has written his first novel, and has produced copies of his book that he plans to sell to independent bookstores for $16.50 a copy. Each copy of the book costs $8.75 to print at a local printing
Sarah is considering the start-up of a residential cleaning business. She can buy a used car for $8000. She has a friend who will work for her. Based on her research, Sarah believes she can charge
A heavy equipment manufacturing company has annual fixed costs of $14,000,000. Unit selling price is $15,000 and unit variable costs are $8,000.a. What is the company's break-even point in unit sales
Lanark Industries produced 580,000 USB memory sticks last year. Total costs last year were $3,710,000, which included $3,335,000 of total variable costs. If fixed costs and unit variable costs do not
Treetop Trekking provided forest tours for 875 customers last month. Total costs last month were $4800, including $600 of fixed costs. Fixed costs are expected to increase by 10% next month, due to
Canada Mills Corporation's annual fixed costs are $690,000. Variable costs are equal to 40% of sales revenue.a. What annual sales level must Canada Mills achieve in order to break even?b. What annual
Whitewater Industries sells a plastic one-piece kayak for $850. Unit variable costs are $400, and fixed costs for this product line are $20,000 per month.a. Construct a break-even chart for the range
A $3000 loan at 5% was made on March 1. Two payments of $1000 each were made on May 1 and June 1. What payment on July 1 will pay off the loan?
A Joan was advanced on March 16 and repaid on October 29 of the same calendar year. How many days was the loan outstanding?
How much interest will be earned on a deposit of $42,000 if the funds are invested for 90 days at 6.15%?
How much interest was paid on a $1500 loan for 7 months at an annual interest rate of 2.5%?
$5000 was borrowed at 2.5% on March 1. On April 1 and June 1, the borrower made payments of $2000 each. What payment was required on August 1 to pay off the loan's balance?
A deposit was made on November 18 and Withdrawn on January 29 of the next calendar year. How many days was the investment on deposit?
Martin invested $5500 for 10 months at 3.75%. How much will Martin have in total when the investment matures?
Montel loaned $6800 to a friend for 13 months at an annual interest rate of 3. 7% simple interest. How much interest did the borrower owe?
A $3000 loan on March 1 was repaid by payments of $500 on March 31, $1000 on June 15, and a final payment on August 31. How much was the third payment if the interest rate on the loan was 8.25%?
How much would you need to deposit on March 10 into an account earning 5% if your goal is to have $7500 on December 1 of the same year?
A $6500 Joan at 5.75% was advanced on June 17, 2013. How much interest was due when the Joan was repaid on October 1, 2013?
What payment, 174 days from now, is equivalent to $5230 paid today? Assume that money is worth 5.25% per annum.
$10,000 was borrowed at 3.5% on July 17. The borrower repaid $5000 on August 12, and $2000 on September 18. What final payment is required on November 12 to fully repay the loan?
How many months would it take for an investment of $6800 to grow to be worth $6958.66 at 4%?
Patrick is scheduled to receive $1480 in 60 days from now. How much should he accept today as an equivalent payment if his money can earn 6.75%?
An agreement required that Joseph pay you $1000 six months ago, and an additional $500 today. Joseph missed the $1000 payment. What single payment today would you accept as full settlement of the
A loan of $25,000 at 4.25% was advanced on September 12, 2016. A payment of $12,000 was made on January 5, 2017, and a second payment of $8000 was made on February 18, 2017.a. What third payment on
Sylvie invested $17,000 at 4.65% on September 8, 2016.a. How much will her investment be worth on March 18, 2017?b. How much interest did Sylvie earn on the investment?
A payment stream consists of $1200 payable today ai1d $1800 payable in 6 months. What is the equivalent value of the payment stream 2 months from now if money is worth 6.5%?
A $1000 loan at 3% was repaid by two equal payments made 30 days and 60 days after the date of the loan. Determine the amount of each payment.
Yussef owes a total of $5878.78 to repay a loan that was advanced 10 months ago at a rate of 8.85%. What amount did Yussef originally borrow?
What amount received on January 13 is equivalent to $1000 received on the preceding August 12 if money can earn 5.5%?
How much interest will be earned on $5000 in 5 months if the annual simple interest rate is 1.5%?
Two equal payments, 50 days and 150 days after the date of the loan, paid off a $3000 loan at 8.25%. What was the amount of each payment?
Petra has forgotten the rate of simple interest she earned on a 120-day term deposit at Scotiabank. At the end of the 120 days, she received interest of $327.95 on her $21,000 deposit. What rate of
Rasheed wishes to postpone for 90 days the payment of $450 that he owes to Roxanne. If money now earns 4.75%, what amount can he reasonably expect to pay at the later date?
On June 15, Dylan has obtained two quotes to have the roof of his home reshingled. Rocca Roofing will do the job for $8200 payable on June 15. Sylvestor Roofing will do the job for $5000 payable on
Vivian is selling a cottage property. In the original agreement to purchase, the buyers were to pay $325,000 on September 1, 2015. If the buyers have proposed an earlier closing date, how much should
What amount invested at 4.5% on November 19, 2016 had a maturity value of $10,000 on March 3, 2017?
Alysha borrowed money on November 4, 2015 and repaid it 84 days later. On what date did she repay the Joan?
What annual rate of return would money have to earn for $1975 to be equivalent to $1936.53 paid 100 days earlier?
Colleen loaned $1800 to her friend for 16 months at 8.25% simple interest. How much interest did her friend owe on the repayment date?
What payment in 2 months from now is equivalent to a $10,000 payment today if money can earn 3.95%?
Elijah repaid a debt on March 16, 2016. The debt had been outstanding for 92 days. On what date did Elijah borrow the money?
Gerald sold his home, which he owned "mortgage-free" for $612,000, and invested the cash at 3.25% simple interest while he decided whether to buy another property or move into an apartment. If Gerald
Marta borrowed $1750 from Jasper on November 15, 2016, and agreed to repay the debt with simple interest at the rate of 7.4% on June 3, 2017. How much interest was owed on June 3?
$850 borrowed on January 7 was repaid with interest at an annual rate of 7% on July 1 of the same calendar year. What was the amount of interest? Assume February has 28 days.
An invoice states that interest will be charged on overdue accounts at the rate of 1 1/2 % per month. What will the interest charges be on a $3760 billing that is 3 months overdue?
Brendyn was scheduled to pay $5000 in 8 months from now to settle a debt. If money can earn 4.5% on low-risk investments, how much should the lender be willing to accept today as an equivalent
The interest rate on $27,000 borrowed on October 16, 2016 was 8. 7%. flow much interest will be owed on the April 15, 2017 repayment date?
What was the principal amount of a Joan at 9.5% if $67.78 of interest accrued from October 28, 2016 to April 14, 2017?
A $7760 investment earning 6.25% matured at $8083.33. What was the term (in months) of the investment?
What is the economic value today of each of the following payment streams if money can earn 7.5%? (Note that the two streams have the same total nominal value.) a. $1000, $3000, and $2000 due in
Sehar owed $5200 in tuition to her college admissions office. She missed the September 20 deadline, and now wishes to settle her account in full on October 9. If her college imposes a late fee equal
Abbey owed $162.50 to her town water department. The bill was due on November 8. When Abbey paid the bill on December 12, she paid a total of $171.50, including a late penalty. What annual simple
To settle a $570 invoice, Anna can pay $560 now or the full amount 60 days later.a. Which alternative should she choose if money can earn 10.75%?b. What rate would money have to earn for Anna to be
Peter and Reesa can book their Horizon Holiday package at the early-booking price of $3900, or wait 4 months and pay the full price of $3995.a. Which option should they select if money can earn a

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