1. Find the simple interest earned on a deposit of S5,750 that is left on deposit for 3.5 years and earns an annual interest rate of 4.5%.
1. Find the simple interest earned on a deposit of S5,750 that is left on deposit for 3.5 years and earns an annual interest rate of 4.5%.
Chapter9: Sequences, Probability And Counting Theory
Section9.4: Series And Their Notations
Problem 56SE: To get the best loan rates available, the Riches want to save enough money to place 20% down on a...
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Transcribed Image Text:Question no 02:
1. Find the simple interest earned on a deposit of S5,750 that is left on deposit for 3.5 years and earns an
annual interest rate of 4.5%.
2. Three years after investing $15,000, a retired couple received a check for $3,375 in simple interest. Find
the annual interest rate their money earned during that time.
3. For their newborn child, parents deposit $10,000 in a college account that pays 8% interest,
compounded annually. How much will be in the account on the child's 17th birthday?
4. If the parents in part e invested S10,000 in an account paying 8%, compounded quarterly, how much
more money would they have after 17 years?
5. What sum must be deposited today at 18% per year compounded monthly if the goal is to a compound
amount of $50, 000 six years from today? How much interest will be earned during this period?
Question no 03:
Determine the present value of a series of 60 monthly payments of $2,500 each which
begins 1 month from today. Assume interest of 12 percent per year compounded
monthly.
Determine the present value of a series of 36 monthly payments of $5,000 each which
begins 1 month from today. Assume interest of 18 percent per year compounded
monthly.
A person wants to buy a life insurance policy which would yield a large enough sum of
money to provide for 20 annual payments of $50,000 to surviving members of the family.
The payments would begin 1 year from the time of death. It is assumed that interest
could be earned on the sum received from the policy at a rate of 8 percent per year
compounded annually.
(a) What amount of insurance should be taken out so as to ensure the desired annuity?
(b) How much interest will be earned on the policy benefits over the 20-year period?
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Transcribed Image Text:Question no 01:
1 A person wishes to deposit $5,000 per year in a savings account which earns interest of 8
percent per year compounded annually. Assume the first deposit is made at the end of
this current year and additional deposits at the end of each following year.
(a) To what sum will the investment grow at the time of the 10th deposit?
(b) How much interest will be earned?
2 A company wants to deposit $500,000 per year in an investment which earns interest of
10 percent per year compounded annually. Assume the first deposit is made at the end of
the current year and additional deposits at the end of each following year.
(a) To what sum will the investment grow at the time of the 10th deposit?
(b) How much interest will be earned?
3 A mother wishes to set up a savings account for her son's education. She plans on
investing $750 when her son is 6 months old and every 6 months thereafter. The account
earns interest of 8 percent per year, compounded semiannually.
(a) To what amount will the account grow by the time of her son's 18th birthday?
(b) How much interest will be earned during this period?
4 A local university is planning to invest $500,000 every 3 months in an investment which
earns interest at the rate of 12 percent per year compounded quarterly. The first invest-
ment will be at the end of this current quarter.
(a) To what sum will the investment grow at the end of 5 years?
(b) How much interest will be earned during this period?
5 A person wants to deposit $10,000 per year for 6 years. If interest is earned at the rate of
10 percent per year, compute the amount to which the deposits will grow by the end of
the 6 years if:
(a) Deposits of $10,000 are made at the end of each year with interest compounded
annually.
(b) Deposits of $5,000 are made at the end of each 6-month period with interest com-
pounded semiannually.
(c) Deposits of $2,500 are made at the end of every quarter with interest compounded
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