Questions from Business Mathematics

Q: Accurate Accounting obtained a private loan of $25,000 for

Accurate Accounting obtained a private loan of $25,000 for five years. No payments were required, but the loan accrued interest at the rate of 9% compounded monthly for the first 2 1 2 years and then...

Q: A credit union’s Rate Climber GIC pays rates of 2%, 2

A credit union’s Rate Climber GIC pays rates of 2%, 2.5%, and 3% compounded semiannually in successive years of a three-year term. 1. What will be the maturity value of $12,000 invested in this GIC? 2...

Q: The home the Bensons purchased 13 years ago for $85,

The home the Bensons purchased 13 years ago for $85,000 is now appraised at $215,000. What has been the annual rate of appreciation of the value of their home during the 13-year period?

Q: A bank offers a rate of 5.3% compounded semiannually

A bank offers a rate of 5.3% compounded semiannually on its four-year GICs. What monthly and annually compounded rates should it quote in order to have the same effective interest rate at all three no...

Q: Use the formula PV = FV(1 + i)–n

Use the formula PV = FV(1 + i)–n to calculate i if PV = $5167.20, FV = $10,000, and n = 15.

Q: If an invoice indicates that interest at the rate of 1.

If an invoice indicates that interest at the rate of 1.2% per month will be charged on overdue amounts, what effective rate of interest will be charged?

Q: If the nominal rate of interest paid on a savings account is

If the nominal rate of interest paid on a savings account is 3% compounded monthly, what is the effective rate of interest paid?

Q: If an interest rate of 6.9% compounded semiannually is

If an interest rate of 6.9% compounded semiannually is charged on a car loan, what effective rate of interest should be disclosed to the borrower?

Q: If a $15,000 investment grew to $21,

If a $15,000 investment grew to $21,805 in 4 1 2 years of quarterly compounding, what effective rate of return was the investment earning?

Q: Camille can obtain a residential mortgage loan from a bank at 8

Camille can obtain a residential mortgage loan from a bank at 8.75% compounded semiannually or from an independent mortgage broker at 8.6% compounded monthly. Which source should she pick if other ter...