Questions from Business Mathematics


Q: Wojtek purchased a $10,000 face value strip bond on

Wojtek purchased a $10,000 face value strip bond on a date when it had 14 years left until maturity. The purchase price was based on a market yield of 6.2% compounded semiannually. He sold the bond 4...

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Q: A four-year $8000 promissory note bearing interest at 13

A four-year $8000 promissory note bearing interest at 13.5% compounded monthly was discounted 21 months after issue to yield 12% compounded quarterly. What were the proceeds from the sale of the note...

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Q: An eight-year note for $3800 with interest at 11

An eight-year note for $3800 with interest at 11% compounded semiannually was sold after three years and three months to yield the buyer 14% compounded quarterly. What price did the buyer pay?

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Q: The contract for a $4000 loan at 9% compounded quarterly

The contract for a $4000 loan at 9% compounded quarterly requires two payments. The first payment of $2000 is required two years after the date of the loan. (It is applied to the balance owed after co...

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Q: A $5000 loan at 10% compounded annually is to be

A $5000 loan at 10% compounded annually is to be repaid by two payments three and five years from the date of the loan. The first payment of $3000 will be applied to the balance owed after conversion...

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Q: Mrs. Sandhu placed $11,500 in a four-

Mrs. Sandhu placed $11,500 in a four-year compound interest GIC earning 6.75% compounded monthly. What is the GIC’s maturity value?

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Q: A trust company offers three-year compound interest GICs earning 4

A trust company offers three-year compound interest GICs earning 4.8% compounded monthly or 4.9% compounded semiannually. Which rate should an investor choose?

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Q: If an investor has the choice between rates of 5.4

If an investor has the choice between rates of 5.4% compounded quarterly and 5.5% compounded annually for a six-year GIC, which rate should she choose?

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Q: How, if at all, will the future value of $

How, if at all, will the future value of $1000 invested in a three-year variable-rate GIC differ if it earns 2%, 3%, and 4% in successive years instead of 4%, 3%, and 2% in successive years?

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Q: Sun Life Financial offers a five-year compound interest GIC earning

Sun Life Financial offers a five-year compound interest GIC earning rates of 2.5%, 3%, 3.5%, 4.25%, and 5% in successive years. Manulife offers a similar GIC paying rates of 2.75%, 3.25%, 3.5%, 4%, an...

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