Scribd
Upload
109 views2 pages

MA246 Assignment 1

This document contains the details of an assignment for a financial math course. It includes 6 problems related to calculating proceeds, payments, interest rates, and growth of money over time when interest is compounded at various rates. The student must determine discounted amounts, total values, payment amounts, doubling periods, and annual interest rates given different terms and conditions.

Uploaded by

Num Num Tasty
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
109 views2 pages

MA246 Assignment 1

This document contains the details of an assignment for a financial math course. It includes 6 problems related to calculating proceeds, payments, interest rates, and growth of money over time when interest is compounded at various rates. The student must determine discounted amounts, total values, payment amounts, doubling periods, and annual interest rates given different terms and conditions.

Uploaded by

Num Num Tasty
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

Financial Math – MA 246

Assignment #1
Due Date: Feb. 4th
1) Find the proceeds of a non-interest-bearing-promissory note with a face value of
$2000, discounted 10 months before its due date at 6% compounded quarterly
(2 marks).

- 1903.17 would be the total Discounted amount

2) Find the proceeds of a 3-year promissory note with a face value of $7500 and interest
at 7% p.a. compounded quarterly if it is discounted one and a half years before maturity
at 5% p.a. compounded semi-annually (2 marks).

- Total value at maturity: 9,235.79


- Total paid in 1.5 years: 8576.35

3) Haley’s scheduled loan payments of $5000 due in 8 months and $3000 due in 27
months have been rescheduled as a single payment in 18 months. Determine the size of
the single payment if interest is 7% compounded semi-annually, and the focal date is
when the single payment is due (3 marks).

- 1st payment moves forwards for 5607.52$


- 2nd Payment moves back for 2412.68
- Total Payment: 8020.20

4) James is due to make a payment of $6500 now. Instead, he has negotiated to make
two equal payments, the first in 6 months and the other a year from now. Determine
the size of the equal payments if money is worth 8% compounded quarterly.
Choose today as the focal date for convenience (3 marks).

- X Values: 0.961168781+0.923845426
- 1.88501421/6500
- 3448.25 - Total Payment
5) How many years would it take for ​any​ amount of money to double in value when
accumulating interest at a rate of 9% p.a. compounded semi-annually? (2 marks)

- N = ln2/ln1.045
- N = 0.6931/0.0440
- N= 15.75

Therefore: I’d take Roughly 7-8 years to Double your money using that rate

6) What nominal annual rate of interest compounded monthly would be necessary for
$250 to grow to $337.22 in a period of 5 years? (2 marks)

- I=(337.22/250)^(1/(12*5))-1
- I=0.00500037064
Annual interest: 6%

You might also like