Scribd
Upload
47 views1 page

Solve The Problems by Using Equation

This document contains 12 word problems involving calculating compound interest, present value, and implied interest rates. The problems cover topics such as determining the future value of deposits in savings accounts earning various interest rates compounded annually and semiannually over periods of 3 to 10 years, calculating implied interest rates, determining how long it takes an amount to double at a given interest rate, and finding present and future values.

Uploaded by

Idris
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
47 views1 page

Solve The Problems by Using Equation

This document contains 12 word problems involving calculating compound interest, present value, and implied interest rates. The problems cover topics such as determining the future value of deposits in savings accounts earning various interest rates compounded annually and semiannually over periods of 3 to 10 years, calculating implied interest rates, determining how long it takes an amount to double at a given interest rate, and finding present and future values.

Uploaded by

Idris
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

Solve the problems by using equation

1. What will a deposit of $4,500 at 10% compounded semiannually be worth if left in the
bank for six years?

2. What will a deposit of $4,500 at 7% annual interest be worth if left in the bank for nine
years?

3. What will a deposit of $4,500 at 12% compounded monthly be worth at the end of 10
years?

4. How much will $1,000 deposited in a savings account earning an annual interest rate of 6
percent be worth at the end of 5 years?

5. How much will $1,000 deposited in a savings account earning a compound annual
interest rate of 6 percent be worth at the end of 3 years?

6. How long does it take for $856 to grow into $1,122 at an annual interest rate of 7%?

7. What annual interest rate is implied if you lend someone $1,850 and are repaid
$2,078.66 in two years?

8. You have $10,000 to invest. Assuming annual compounding, how long will it take for the
$10,000 to double if it is invested at an annual interest rate of 14 percent?

9. The Tried and True Corporation had earnings of $0.20 per share in 1978. By 1995, a
period of 17 years, its earnings had grown to $1.01 per share. What was the compound
annual rate of growth in the company's earnings?

10. What is the present value of $800 to be received at the end of 8 years, assuming an
annual interest rate of 8 percent?

11. A life insurance company has offered you a new "cash grower" policy that will be fully
paid up when you turn 45. At that time, it will have a cash surrender value of $18,000.
When you turn 65, the policy will have a cash surrender value of $37,728. What annual rate
of interest is the insurance company promising you on your investment?

12. If you triple your money in 10 years, what interest rate did you earn?

You might also like