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5. A principal invested now and half that amount invested one year from now will be worth a total of $4,000 three years from now. Interest is 3.6% APR compounding quarterly. What is the principal rounded up to the nearest dollar? r= 3.700)(4) 2 0 09 (A) $767 (B) $1,227 (C) $2,348 (D) $2,424 (E) none of (A) - (D)

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Reid Wolff
Reid WolffLv2
6 Dec 2018
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2. A total debt of $4,000 due three years from now and $5,000 due 50 months from now is to be repaid by three payments as follows: (i) a first payment is made 8 months from now; 42 months (ii) a second payment of $3,000 is made two years from now; 11 (iii) a third payment (which is 25% less than the first payment) is made 3 years from now. Interest is 2.4% APR compounding monthly. Find the payments in (i) and (iii) rounded-up to the nearest dollar. A complete money-time diagram and equation of value are required for full points. (11 points)

9. (15 points A total debt of $5000 due 25 months from now and $3500 due 5 years from now is to be repaid by the following 3 payments: - The first payment is made 1 year from now, - The second payment is double the first and is made 3 years from now, - The third payment is the same as the second and made 4 years from now. Interest is at a nominal rate of 3.6% compounded monthly. Find the amount of each payment rounded up to the nearest dollar (A complete answer requires a money-time line and an equation of value.)

4. The two parts of this question are independent of each other. (a) A car is purchased for $8,995 down now plus bi-weekly payments of $276 for four years. Interest is 5.2% APR compounding bi-weekly and all payments are made at the beginning of each bi-weekly compounding period. Calculate the "cash price of the car rounded up to the nearest dollar. [7 points) ("Cash price” = full price now, "bi-weekly” = every other week, 1 year = 52 weeks) (b) One of your MATA32F professors claims that an investment at 7.3% APR can yield a 25% return on that investment at the end of three years. Do you believe them? Justify your answer with an appropriate calculation. (5 points)

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