Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:GE-MM The Mathematics of Finance
1. What is the simple interest for a principal of $650 invested at a rate of 9% for 5 years?
2. $4200 is invested for 9 months at an annual simple interest rate of 12%. How much interest will be earned? Round your
answer to the nearest cent, if necessary.
3. Calculate the simple interest earned when P = S 14,000, r = 8.9% and * = 70 days using the ordinary method. Round
to the nearest cent.
4. What is the simple interest to the nearest cent on a credit card balance of $1,150.00 at 11% interest for 3 months?
5. Use the formula 4 = P(1+rt) to calculate the maturity value of the simple interest loan when P = $3400,
7= 6.6% and = 2 months.
6. Calculate the simple interest rate when P = $ 3600_ I = $ 160 and
months. Round to the nearest hundredth.
7. Calculate the simple interest due on a four-month loan of $900 if the interest rate is 2.2% per month.
8. Andre De Quadros bought a $1500, 9-month certificate of deposit (CD) that would earn 9% annual simple
interest. What is the value of the CD when it matures?
9. Susan bought a 9-month $1400 certificate of deposit. At the end of 9 months, she received $104 simple interest. Find
the annual rate of simple interest paid. Round your answer to the nearest percent.
10. The maturity value of a three-month loan of $2,500 is $2,577. Find the simple annual interest rate to the nearest
hundredth.
11. Calculate the compound amount using the compound amount formula when P = $3,000,7 = 9% compounded
semiannually, and =8 years. Round to the nearest cent.
12. Find the future value if $2700 is invested for 7 years at an annual rate of 9% compounded quarterly.
13. What interest will be earned if $4000 is invested for 4 years at an annual rate of 7% compounded monthly?
14. Calculate the future value when P= S5,000 7 = 11% compounded monthly, and = 8 years. Round to the nearest
cent.
15. Calculate the present value when 4 = $ 26,000 r = 9% compounded quarterly, and t = 30
years. Round to the
nearest cent.
16. If $1,420 is invested in an account which earns 8% interest compounded annually, which will be the balance of the
account at the end of 17 years?
17. Calculate the future value of $8,000 earning 9% interest, compounded quarterly, for 11 years. Round to the nearest
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