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:TOPIC: COMPOUND INTEREST
Word Problems
1.
Aaron Abott invested 100,000 at 12% interest, compounded semi-annually, for 3
years. Manually calculate the compounded amount and the compounded interest of
Aaron's investment.
2.
(a) Find the simple interest on 60,000 for one year at 10%. (b) Find the
compound interest if the same investment is compound semi-annually? (c) How much is
the compound interest greater than the simple interest?
3. (a) What is the simple interest on P60,000 for six months at a simple interest of 12%
(b) What is the compound interest if the same investment is compounded quarterly? (c)
Obtain the difference.
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(a) Find the simple interest on 60,000 for one year at 10%. (b) Find the
compound interest if the same investment is compound semi-annually? (c) How much is the compound interest greater than the simple interest?
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