Sue decided to invest the $1500 in savings from her part-time job into a 6 month short-term investment account at the bank. The account earns 4.5% simple interest per year. 

a) What is the accumulated amount of the investment at the end of the 6 months? 

b) How much simple interest was earned? 

2. Ned took the $700 he received for his birthday and invested it in a GIC which earns interest at a rate of 3.5% per year compounded semi-annually. How much money would Ned have after 5 years? 

3. After working all summer Ryan plans on investing a portion of his savings to purchase a car in 3 years. Determine the amount of summer savings he should invest now, at an interest rate of 5.4% compounded semi-annually, if he wants to have $6000 to purchase the car.

4. Tia is currently in grade 9 and plans on saving money for college. She plans on depositing $200 each month for the next 4 years into an account which pays an interest rate of 6% per year, compounded monthly. 

a) How much money will be in the account at the end of the 4 years when the last payment is made? 

b) How much interest will Tia have earned when the last payment is made? 

5. Hanes and Nadena want to save $30000 in order to put a down payment on a house in 5 years. 

a) How much money do they need to deposit quarterly into an investment account that earns 4.2% per year compounded quarterly, in order to have enough for the down payment? 

b) How much of the $30000 was interest at the end of the 5 years?

6. Darrich received an inheritance from his grandmother. Starting next month he is to receive monthly payments of $1000 for 10 years from an investment account that was started for him as outlined in the will. How much money did he inherit if the investment fund earns interest at a rate of 4.8% per year compounded monthly? 

7. Greg wins a lump sum of $250000 lottery prize but does not want the money in his bank account to avoid over spending. Instead he wants to receive monthly payments for the next 15 years. 

a) If the money is invested at an interest rate of 3.6% per year, compounded monthly, how much money would Greg receive each month? 

b) Calculate the total amount of money that Greg would receive in total over the 15 years. 

c) How much interest would Greg receive in total over the 15 years?

Answer rating: 100% (QA)

a The interest rate is 45 per year which means the interest rate for 6 months is half of that or 225 To calculate the accumulated amount at the end of 6 months we can use the formula Accumulated amoun... View the full answer