"2^nd" 6% Assignment on Compound Interest

Please email only final answer's to: a..o@georgebrown.ca

DUE by 6:00 PM on Wednesday April 19- (as answers will be posted at 6PM)

1. Find the effective rate of interest (f) for the following: (Circle the highest rate)

a. 14% compounded monthly

b. 14.25 % compounded quarterly

c. 14.5% compounded semi-annually

d. 14.75 % compounded annually

1. Convert 9% compounded semi-annually to a rate compounded monthly that maintains the same effective rate of interest.
   1. Find the effective rate of 9% compounded semi-annually.
   2. Convert it (that rate from "a") to a rate compounded monthly.

1. An investment of $60,000 (PV) earned $10,000 in interest (I) over a two-and-a-half-year period (Hint: FV = PV + I). What was the nominal interest rate compounded monthly associated with the investment? (10.2 - Find "i")

1. * A demand note for $1,000,000 matured for $1,024,229.7. Given it was issued on March 2 at 6% compounded monthly, find the maturity date. (Hint: 10.1- First find n, then find time in years, then days AND then maturity date)

1. A store sells novels at a selling price of $20 that they buy for $8. If the fixed cost for the store is $3,600, determine:
2. The number of novels needed to be sold to breakeven.
3. The profit the make if they sell 500 novels.
4. The number of novels that must be sold to make a profit of $1,200.
5. The selling price they must charge to breakeven if fixed costs increase to a total of $5,400 and they expect to sell 600 novels.