Interest: I = PRT

Maturity Value: S = P + I

Maturity Value or Future Value: S = P (1 + rt)

Principal Value or Present Value: P = S

---------

(1 + rt)

Number of days in a month:

January 31 February 28 March 31 April 30 May 31 June 30 July 31 August 31 September 30 October 31 November 30 December 31

1) Fill in the missing values in the chart below. (1 mark each-4 total)

	Principal (P)	Rate (r)	Time (t)	Interest (I)
a.	$24,781	9 % p.a.	438 days
b.		5 % p.a.	39 months	$50,895
c.	$10,800	% p.a.	1.25 years	$1,653.75
d.	$800	9 % p.a.	_______days	$35.90

2) A 8-month promissory note with a face value of $40,000 was issued on April 4, 2021 at 9 % p.a., determine. (4 marks total)

a. the maturity date (1 mark)

b. the number of days it was issued for (1 mark)

c. the interest on the note (1 mark)

d. the maturity value of the note (1 mark)

3) An $800,000 demand loan was taken out on March 31 from the CIBC Bank at a cost of 9% p.a. The demand loan agreement provided for a final payment on December 26, and payments of $400,000 on June 15 and $300,000 on October 17. Using the declining balance method, how much must be paid on December 26? (8 marks)

a. how much is owing on June 15^th after the payment?

b. how much is owing on Oct 17^th after the payment?

c. how much is the last payment on Dec 26th?

4) A 219-day promissory note issued at 12% p.a. matured on November 12, 2021 for $184,812.80. Determine the: (6 marks)

1. The original face value of the promissory note
2. The interest included in the maturity.
3. The original issue date of the promissory note

5) Panasonic Incorporated invested $270,000 into a GIC that pays 4 % p.a. on August 19, 2015, to February 28, 2016.

Determine: (4 marks)

a. the number of days between Aug 19,2015 and Feb 28, 2016

b. the interest (in dollars) the GIC will earn?

(6) An investor bought a $250,000 face Government of Ontario Treasury Bill 355 days before maturity at an interest rate of 3.9% p.a. She sold the T-bill 146 days later at a rate of 2.45% p.a. Determine: (8 marks total)

a. The amount she paid for the T-bill.

b. The amount she sold the T-bill for

c. The rate of return (R) she realized on her investment over the 146 days.

(7) Debt payments of $1,900 due 18 months ago from today, $1,600 due today and $2,400 due in 4 years from today, are to be replaced by one single equivalent value payment in 6 months from today. If the cost of money is 15% p.a. and the focal point is in 6 months from today, how large is that unknown payment? (8 marks)

a) What is the value of the $1,900 at the focal point?

b) What is the value of the $1,600 at the focal point?

c) What is the value of the $2,400 at the focal point?

d) What is the size of the large payment at the focal point that replaces all three numbers or debts?

8) You borrowed $6,000 from the Estonian Airline Credit Union at 15% p.a. calculated on the monthly-unpaid balance. You agreed to repay the loan in blended payments of $2,000 per month and one final payment in 4 months. The blended payments would include interest and principal repaid in the payment. Using the following table, complete a repayment schedule for the loan: (8 marks)

Payment Number	Balance before payment	Amount Paid	Interest paid. (Monthly rate of interest) ________	Principal repaid	Balance after payment
0					$6,000
1		$2,000
2		$2,000
3		$2,000
4		?_________ ?