1. A 364 day T-bill with a face value of $1,000,000 was purchasedby an investor at an interest rate of 2.38%, and sold after 100days at interest rate of 2.35%.ï¼1ï¼What is the price paid for theT-bill by the investor? ï¼2ï¼ What is the price of theT-bill sold by the investor?ï¼3ï¼ How much profit did theinvestor get?ï¼4ï¼What was the simple interest rate did the investorearn?
2. A 120-day, 8% promissory note with face value of$15,000 issued on May 1, 2012 was sold on August 5, 2012 while thecost of money is 4%.ï¼1ï¼When is the maturity date of thepromissory note? (Answer in format of date isMM/DD/YYYY)ï¼2ï¼ What is the maturity value of the promissorynote?ï¼3ï¼ What is the price the note was sold on August 5,2012?ï¼4ï¼ What is the profit did the note holder get fromselling the note?ï¼5ï¼ What is the interest rate did the noteholder earn from selling the note?ï¼6ï¼ If the buyer cash thenote on the maturity date, how much profit did the buyerearn?
3. A demand loan was taken out from the TD Bank at a cost of 9%p.a. The demand loan agreement provided for payments of $1,300 onApril 9, 2014, $1,500 on May 5, 2014 and a final payment on August8, 2014. The loan was originally taken out for $3200 on March 2,2014.ï¼1ï¼How much was the outstanding balance of the loan rightafter the first payment made on April 9, 2014?ï¼2ï¼ How much wasthe outstanding balance of the loan right after the second paymentmade on May 5, 2014?ï¼3ï¼ How much was the final payment onAugust 8, 2014 to pay out the loan?
4. A Credit Card had the following purchases in the month ofJune. If the rate attached to the card is 21.5% and there have beenno other purchases, answer the following questions.
June 10: Cash Advance of $200.00.
June 27: Purchased a suite for $648.35 from Bay.
ï¼1ï¼Find the amount of interest charged on the cash advance fromJune 10 to June 30.ï¼2ï¼Find the amount that must be paid on June 30,to fully pay-off the credit card balance.ï¼3ï¼ If only theminimum of $10 is paid on June 30, and there are no othertransactions in June, how much will be owing on the card on July31?
5. You borrowed $3000 at 9% per annuum calculated on the unpaidmonthly balance and agreed to repay the principal together withinterest in monthly payments of $500 each.ï¼1ï¼How much is theoutstanding balance of the loan right after the firstpayment?ï¼2ï¼ How much is the outstanding balance of theloan right after the second payment?ï¼3ï¼How many $500 payments willbe made before the last smaller payment to pay off theloan?ï¼4ï¼ How much will be the last payment?
6. $850 was invested in an bank account atinterest 3.6% compounded quarterly for four years.ï¼1ï¼Howmuch money will be in the account at the end of fouryears?ï¼2ï¼ How much interest will be from thisinvestment at the end of four year?
7. $1500 are invested at 7.2% compounded monthly for sevenyears.ï¼1ï¼How much is the mature value at the end?ï¼2ï¼How muchinterest will be earned at the end?
8. David borrowed $5000 at 10% compounded semi-annually. He repaid$2000 after two years from now and $2500 after three years fromnow.ï¼1ï¼How much is the outstanding balnce of his debt right afterhis payment at the end of two years?ï¼2ï¼How much is the outstandingbalnce of his debt right after his payment at the end of threeyears?ï¼ï¼3ï¼How much will he still owe after five years?
9. A variable rate demand loan showed an initial balance of$12000, payments of $5000 after 18 months, $4000 after 30 months,and a final payment after 5 years.Interest was 11% compoundedsemi-annually for the first two years and 7.5% compounded monthlyfor the remaining time.ï¼1ï¼What is the outstanding balance of theloan after the first payment at the end of 18 months?ï¼2ï¼ Whatis the outstanding balance of the loan after the second payment atthe end of 30 months?ï¼3ï¼What was the size of the finalpayment?
10. You made a registered retirement savings plan deposit of $1000on December 1, 2008, at a fixed interest rate of 3% compoundedmonthly. If you withdraw the deposit on August 1, 2015, howmuch will you receive? How much interest will you have made?
10. How much money would accumulate to $25000 at 4.5% compoundedsemi-annually in five years, four months?
11. A four-year non-interest bearing promissory note for $3750 isdiscounted 32 months after the date of issue at 5.5% compoundedsemi-annually. Find the proceeds of the note.
12. A six-year note for $1750 issued on December 1, 2012,with interest at 6.5% compounded quarterly, is discounted on July1, 2015, at 7% compounded semi-annually. How much is thematurity value of the note? What are the proceeds of the noteon July 1, 2015?
13. A debt of $4000 is repaid by payments of $1500 in nine months,$2000 in 18 months, and a final payment in 27 months. Ifinterest was 10% compounded quarterly, what was the amount of thefinal payment?
14. Scheduled payments of $400 due today and $700 due with interestat 4.5% compounded monthly in eight months are to be settled by apayment of $500 six months from now and a final payment in fifteenmonths. Determine the size of the final payment if money is worth6% compounded monthly.
15. Two debts ---- the first of $800 due six months ago and thesecond of $1400 borrowed one year ago for a term of three years at6.5% compounded annually ---- are to be replaced by a singlepayment one year from now. Determine the size of the replacementpayment if interest is 7.5% compounded quarterly and the focal dateis one year from now.
16. Savona borrowed $7500 from her aunt today and has agreed torepay the loan in two equal payments to be made in one year andthree years from now. What is the size of the equal payments ifmoney is worth 8% compounded quarterly?
17. In how many years will $1000.00 grow to $2000 at 3.6%compounded quarterly? Answer with 2 decimal places.
18. A loan of $2000 taken out today is to be repaid by a payment of$1200 in six months and a final payment of $1000. If interest is5.318% compounded quarterly, how many months from now should thefinal payment be made? Answer with whole number.
19. What is the semi-annually compounded interest rate if $200accumulates to $318.77 in eight years? Answer in percentage withtwo decimal places.
20. What is the quarterly compounded interest rate if $200accumulates to $318.77 in eight years? Answer in percentage withtwo decimal places.
21. What is the monthly compounded interest rate if $200accumulates to $318.77 in eight years? Answer in percentage withtwo decimal places.
22. What is the effective interest rate of 6.75% compoundedmonthly? Answer in percentage with two decimal places.
23. What is the effective interest rate of 6.75% compoundedquarterly? Answer in percentage with two decimal places.
24. Ariel has $1000 to invest. He can get interest rate 3.6% eithercompounded monthly or compounded semi-annually. How much more canhe get by choosing monthly compounded interest if he invests themoney for 5 years?
25. Find the nominal annual rate compounded semi-annually that isequivalent to an annual rate of 6% compounded quarterly. Answer inpercentage with three decimal places.
26. Royal Bank currently offers 2.94% compounded semi-annually onpremium savings deposit. His friend has told him that he would earnmore interest if his savings compounded more frequently. What isthe nominal annual rate compounded monthly that would be equivalentto his semiannual-rate? Answer in percentage with two decimalplaces.
