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1. Suppose £5000 is invested for five years. Calculate the amount accumulated at the end of five years if interest is compounded annually at a nominal rate of (a) 5%, (b) 7%, (c) 10 %.

1. Suppose £5000 is invested for five years. Calculate the amount accumulated at the end of five years if interest is compounded annually at a nominal rate of (a) 5%, (b) 7%, (c) 10 %.

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Simple and Compound Interest 1. Suppose £5000 is invested for five years. Calculate the amount accumulated at the end of five years if interest is compounded annually at a nominal rate of (a) 5%, (b) 7%, (c) 10%. 2. A savings account of £10000 earns simple interest at 5% per annum. Calculate the value of the account (future value) after six years. 3. £2500 is invested at a nominal rate of interest of 5% compounded annually. Calculate the amount accumulated at the end of (a) 1 year, (b) 4.5 years, (c) 10 years, (d) 20 years. 4. Calculate the present value of £6000 that is expected to be received in three years' time with simple interest of 7.5% per annum. 5. How much is a sum of £3500 worth at the end of five years if deposited at (a) 11% simple interest and (b) 11% compound interest, each calculated annually? 6. Calculate the present value of £6500 to be received in two years' time when the interest rate is 8% per annum, compounded annually. 7. Calculate the present value of £10000 due in five years if interest is compounded annually at 4.5%.
Transcribed Image Text:Simple and Compound Interest 1. Suppose £5000 is invested for five years. Calculate the amount accumulated at the end of five years if interest is compounded annually at a nominal rate of (a) 5%, (b) 7%, (c) 10%. 2. A savings account of £10000 earns simple interest at 5% per annum. Calculate the value of the account (future value) after six years. 3. £2500 is invested at a nominal rate of interest of 5% compounded annually. Calculate the amount accumulated at the end of (a) 1 year, (b) 4.5 years, (c) 10 years, (d) 20 years. 4. Calculate the present value of £6000 that is expected to be received in three years' time with simple interest of 7.5% per annum. 5. How much is a sum of £3500 worth at the end of five years if deposited at (a) 11% simple interest and (b) 11% compound interest, each calculated annually? 6. Calculate the present value of £6500 to be received in two years' time when the interest rate is 8% per annum, compounded annually. 7. Calculate the present value of £10000 due in five years if interest is compounded annually at 4.5%.
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