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Math 1020 in Class Midterm Review

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6 views1 page

Math 1020 in Class Midterm Review

Uploaded by

throwjim27
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Midterm Review

1. The interest paid at the end of the term of a $9125 loan at 0.8% per month was $511.00.
Calculate the term of the loan. (7 months)
2. An investment of $2500 earned interest at 4.5% compounded quarterly f or 1 ½ years, and then
4.0% compounded monthly f or two years. How much interest did the investment earn in
the years? ($395.86)
3. How much must be placed in a f ive-month term deposit earning 4.3% simple interest in order to
earn $500 interest? ($27,906.98)
4. What amount 15 months ago is equivalent to years f rom now? Assume money can
earn 5.4% compounded monthly. ($2241.95)
5. What was the principal amount of a loan at if $67.78 of interest accrued f rom October 28,
2013, to April 14, 2014? ($1550.11)
6. An Investment Savings account of fered by a trust company pays a rate of 1.25% on the f irst
$1000 of daily closing balance, 1.5% on the portion of the balance between $1000 and $3000,
and 1.75% on any balance in excess of $3000. What interest will be paid f or the month of April if
the opening balance was $2439, $950 was deposited on April 10, and $500 was withdrawn on
April 23? ($3.85)
7. A f our-year $8000 promissory note bearing interest at 13.5% compounded monthly was
discounted 21 months af ter issue to yield 12% compounded quarterly. What were the proceeds
f rom the sale of the note? ($10,489.74)
8. A $100,000, 90-day commercial paper certif icate issued by Wells Fargo Financial Canada was
sold on its issue date f or $99,250. What rate of return will it yield to the buyer? (3.06%)
9. What is the time interval (in months) separating equivalent payments of $3500.00 and $3439.80 if
money is worth per annum? (4 months)
10. A debtor owing payments of $750 due today, $1000 due in 2 years, and $1250 due in 4 years requests
a payout figure to settle all three obligations by means of a single economically equivalent payment 18
months f rom now. What is that amount, if the payee can earn 9.5% compounded semiannually?
($2807.84)
11. What is the ef f ective interest rate corresponding to a nominal annual rate of 9% compounded
semi-annually? (9.2%)
12. What quarterly compounded rate is equivalent to 10.5% compounded monthly? (10.59%)
13. Rounded to the nearest month, how long will it take an investment to triple if it earns 9%
compounded annually? (12 years and 9 months)
14. A $3000 loan on March 1 was repaid by payments of $500 on March 31, $1000 on June 15, and
a f inal payment on August 31. What was the third payment if the interest rate on the loan
was ? ($1589.92)

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