MATH_1191_Review_for Test 1V2_SOLUTIONS w explantn_W2024.docx

MATH 1191 Review for Test #1 (Winter 2024) – Based on Hummelbrunner Based on Ch. 7, 8, 9 and 10.1 (Excluding Ch. 8.4, 9.4 and 9.5) SOLUTIONS Prof. Sangita Ghosh George Brown College Time Allowed: 3 Hours (180 Minutes) – Actual Test will be 2 Hours 15 Minutes with Fewer Questions 1. Owen lent Hui $5,000 at 5% p.a. simple interest for 1 year and 3 months. Using the I = Prt formula, calculate the amount of interest charged at the end of the term. Answer: t = 1 year and 3 months = 1 + = 1 + = years I = Prt = (5000) (0.05) ( ) = $312.50 Therefore, he will receive an interest of $312.50 at the end of the time period. 2. On December 25, 2016, Amy deposited $4750 at 5.5% p.a. in her savings account. How much interest was earned and paid into Amy’s account on April 27, 2017? Answer: DBD: from Dec. 25, 2016 to April 27, 2017 = 123 days P= $4750, r=5.5% p.a. = 0.055 p.a., t=123 days = 123 365 years Using the formula I = Pr t , we get: I =( 4750 )( 0.055 )( 123 365 ) = 88.0376... Therefore, the amount of interest earned in this period was $88.04. Page 1 of 12

MATH 1191 Review for Test #1 (Winter 2024) – Based on Hummelbrunner Based on Ch. 7, 8, 9 and 10.1 (Excluding Ch. 8.4, 9.4 and 9.5) SOLUTIONS Prof. Sangita Ghosh George Brown College 3. What principal will earn $39.96 interest from June 18, 2021 to December 15, 2021 at 9.25%? Answer: Number of days = 180; 4. If $650.00 is worth $673.70 after seven months, what rate of interest was charged? Answer: I = S – P = 673.7 – 650.00 = $23.70 Page 2 of 12

MATH 1191 Review for Test #1 (Winter 2024) – Based on Hummelbrunner Based on Ch. 7, 8, 9 and 10.1 (Excluding Ch. 8.4, 9.4 and 9.5) SOLUTIONS Prof. Sangita Ghosh George Brown College 5. At what rate of interest will $1,387 earn $63.84 in 200 days? Answer: 6. In how many months will $1290 earn $100.51 interest at 8 ½ %? Answer: 7. What amount of money will accumulate to $1241.86 in five months at 3.90%? Answer: Page 3 of 12

MATH 1191 Review for Test #1 (Winter 2024) – Based on Hummelbrunner Based on Ch. 7, 8, 9 and 10.1 (Excluding Ch. 8.4, 9.4 and 9.5) SOLUTIONS Prof. Sangita Ghosh George Brown College 8. A six-month promissory note for the amount $19,300 with interest at 8% is issued on April 1, 2022. Calculate the proceeds of the note on June 20, 2022, if money is worth 7.2%. Answer: Due date is June 20, 2022 Page 4 of 12

MATH 1191 Review for Test #1 (Winter 2024) – Based on Hummelbrunner Based on Ch. 7, 8, 9 and 10.1 (Excluding Ch. 8.4, 9.4 and 9.5) SOLUTIONS Prof. Sangita Ghosh George Brown College 9. An investor purchased a 91-day, $100,000 T-bill on its issue date for $99,326.85 After holding it for 42 days, she sold the T-bill for a yield of 2.52%. a) What was the original yield of the T-bill? b) For what price was the T-bill sold? c) What rate of return (per annum) did the investor realize while holding this T-bill? Answer: (a) (b) Page 5 of 12

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help