Questions from Business Mathematics

Q: If TFSA contributions of $10,000 at the end of

If TFSA contributions of $10,000 at the end of every year are projected to generate a plan worth $1,000,000 in 25 years, what effective rate of return was assumed in the forecast?

Q: A finance company paid a furniture retailer $1050 for a conditional

A finance company paid a furniture retailer $1050 for a conditional sale contract requiring 12 end-of-month payments of $100. What effective rate of return will the finance company realize on the purc...

Q: For $150,000, Continental Life Insurance Co. will

For $150,000, Continental Life Insurance Co. will sell a 20-year annuity paying $1200 at the end of each month. What effective rate of return does the annuitant earn?

Q: How much more will a consumer pay for an item listed at

How much more will a consumer pay for an item listed at $1000 (pretax) in Prince Edward Island than in Manitoba?

Q: In an insurance settlement for bodily injury, a court awarded Mr

In an insurance settlement for bodily injury, a court awarded Mr. Goodman $103,600 for two years’ loss of wages of $4000 per month plus interest on the lost wages to the end of the two years. What eff...

Q: A major daily newspaper charges $260 (paid in advance)

A major daily newspaper charges $260 (paid in advance) for an annual subscription, or $26 per month payable at the end of each month to the carrier. What is the effective interest rate being charged t...

Q: Vijay purchased a Province of Nova Scotia bond for $1050.

Vijay purchased a Province of Nova Scotia bond for $1050. The bond will pay $35 interest to Vijay at the end of every six months until it matures in seven years. On the maturity date the bond will pay...

Q: Another type of sales promotion for vehicles is to advertise the choice

Another type of sales promotion for vehicles is to advertise the choice between a “Cash Purchase Price” or “0% Purchase Financing.” The tiny print at the bottom of a GM Canada full-page advertisement...

Q: An advertisement for Hyundai cars offered “2.9% 12

An advertisement for Hyundai cars offered “2.9% 12-month financing or $1000 cash back.” A car buyer financed $17,000 at the low interest rate instead of paying $16,000 cash (after the $1000 rebate). W...

Q: A Ford advertisement offered “$1250 cash back or 1.9

A Ford advertisement offered “$1250 cash back or 1.9% factory financing over 48 months” to purchasers of new Ford vans. A customer financed $20,000 at the low interest rate instead of paying $18,750 c...