Question: Dean has already implemented the first stage

> Evaluate expression for the given values of the variables. Calculate the result accurate to the nearest cent. R i [ 1 − 1 ( 1 + i ) n ] for R = $630, i = 0.115, n = 2

> The interest rate on a $50,000 loan is 7.6% compounded semiannually. Quarterly payments will pay off the loan in ten years. 1. Calculate the interest component of Payment 8. 2. Calculate the principal component of Payment 33. 3. Calculate the total inter

> Semiannual payments are required on an $80,000 loan at 8.0% compounded annually. The loan has an amortization period of 15 years. 1. Calculate the interest component of Payment 5. 2 Calculate the principal component of Payment 17. 3. Calculate the intere

> A $125,000 loan at 6.0% compounded semiannually will be repaid by monthly payments over a 20-year amortization period. 1. Calculate the interest component of Payment 188. 2. Calculate the principal component of Payment 101. 3. Calculate the reduction of

> A five-year loan of $25,000 at 7.2% compounded quarterly requires quarterly payments. 1. Calculate the interest component of Payment 10. 2. Calculate the principal component of Payment 13. 3. Calculate the total interest in Payments 5 to 10 inclusive. 4.

> The interest rate on a $14,000 loan is 8.4% compounded semiannually. Semiannual payments will pay off the loan in seven years. 1. Calculate the interest component of Payment 10. 2. Calculate the principal component of Payment 3. 3. Calculate the interest

> Using the Composition of Loan Payments Chart An interactive chart for investigating the composition of loan payments is provided on Connect. In Student Edition, find “Composition of Loan Payments.” The chart provides cells for entering the essential info

> Elkford Logging’s bank will fix the interest rate on a $60,000 loan at 8.1% compounded monthly for the first four years. After four years, the interest rate will be fixed at the prevailing five-year rate. Monthly payments of $800 (except for a smaller fi

> Christina has just borrowed $12,000 at 9% compounded semiannually. Since she expects to receive a $10,000 inheritance in two years when she turns 25, she has arranged with her credit union to make monthly payments that will reduce the principal balance t

> Elkford Logging’s bank will fix the interest rate on a $60,000 loan at 8.1% compounded monthly for the first four-year term of an eight-year amortization period. Monthly payments are required on the loan. 1. If the prevailing interest rate on four-year l

> Ms. Esperanto obtained a $40,000 home equity loan at 7.5% compounded monthly. 1. What will she pay monthly if the amortization period is 15 years? 2. How much of the payment made at the end of the fifth year will go toward principal and how much will go

> Evaluate expression for the given values of the variables. Calculate the result accurate to the nearest cent. R [ ( 1 + i ) n − 1 i ] ( 1 + i ) for R = $910, i = 0.1038129, n = 4

> An annuity paying $1400 at the end of each month (except for a smaller final payment) was purchased with $225,000 that had accumulated in an RRSP. The annuity provides a semiannually compounded rate of return of 5.2%. 1. What amount of principal will be

> Monthly payments are required on a $45,000 loan at 6.0% compounded monthly. The loan has an amortization period of 15 years. 1. Calculate the interest component of Payment 137. 2. Calculate the principal component of Payment 76. 3. Calculate the interest

> Guy borrowed $8000 at 7.8% compounded monthly and agreed to make quarterly payments of $500 (except for a smaller final payment). 1. How much of the 11th payment will be interest? 2. What will be the principal component of the sixth payment? 3. How much

> A 25-year annuity was purchased with $225,000 that had accumulated in an RRSP. The annuity provides a semiannually compounded rate of return of 5.2% and makes equal month-end payments. 1. What amount of principal will be included in Payment 206? 2. What

> Guy borrowed $8000 at 7.8% compounded monthly and agreed to repay the loan in equal quarterly payments over four years. 1. How much of the fifth payment will be interest? 2. What will be the principal component of the 11th payment? 3. How much interest w

> An annuity providing a rate of return of 5.6% compounded quarterly was purchased for $27,000. The annuity pays $800 at the end of each quarter (except for a smaller final payment). 1. How much of the 16th payment is interest? 2. What is the principal por

> A $37,000 loan at 8.2% compounded semiannually is to be repaid by semiannual payments of $2500 (except for a smaller final payment). 1. What will be the principal component of the 16th payment? 2. What will be the interest portion of the sixth payment? 3

> A 10-year annuity providing a rate of return of 5.6% compounded quarterly was purchased for $25,000. The annuity makes payments at the end of each quarter. 1. How much of the 25th payment is interest? 2. What is the principal portion of the 13th payment?

> A $37,000 loan at 8.2% compounded semiannually is to be repaid by equal semiannual payments over 10 years. 1. What will be the principal component of the sixth payment? 2. What will be the interest component of the 16th payment? 3. How much will Payments

> A $30,000 loan at 6.7% compounded annually requires monthly payments of $450. 1. Calculate the interest component of Payment 29. 2. Calculate the principal component of Payment 65. 3. Calculate the final payment.

> Evaluate expression for the given values of the variables. Calculate the result accurate to the nearest cent. R [ ( 1 + i ) n − 1 i ] for R = $550, i = 0.085, n = 3

> The interest rate on a $100,000 loan is 7.2% compounded semiannually. The monthly payments on the loan are $700. 1. Calculate the interest component of Payment 221. 2. Calculate the principal component of Payment 156. 3. Calculate the final payment.

> Quarterly payments of $3000 are required on an $80,000 loan at 8.0% compounded quarterly. 1. Calculate the interest component of Payment 30. 2. Calculate the principal component of Payment 9. 3. Calculate the final payment.

> A $40,000 loan at 6.6% compounded monthly will be repaid by monthly payments over ten years. 1. Calculate the interest component of Payment 35. 2. Calculate the principal component of Payment 63. 3. Calculate the reduction of principal in Year 1. 4. Calc

> Golden Dragon Restaurant obtained a $9000 loan at 9% compounded annually to replace some kitchen equipment. Prepare a complete amortization schedule if the loan is repaid by semiannual payments over a three-year term.

> Falk Enterprises borrowed $8500 at 6.25% compounded semiannually to purchase a new forklift. The loan agreement stipulates regular semiannual payments of $1600 (except for a smaller final payment). Prepare the full amortization schedule for the loan. Cal

> Gurwinder borrowed $2800 from his brother to purchase a 2005 Subaru Impreza. He agreed to repay the loan, with 2.5% interest compounding quarterly, using quarterly payments of $600 (except for a smaller final payment) until the loan is paid in full. Cons

> Dr. Alvano borrowed $8000 at 8% compounded quarterly to purchase a new X-ray machine for his clinic. The agreement requires quarterly payments of $1000 (except for a smaller final payment). Prepare the full amortization schedule for the loan. Calculate t

> Monica bought a $1250 4K Ultra HD TV for 20% down and payments of $200 per month (except for a smaller final payment) including interest at 15% compounded monthly. Construct the full amortization schedule for the debt. Calculate the total interest paid.

> Falk Enterprises borrowed $8500 at 6.25% compounded semiannually to purchase a new forklift. The loan agreement stipulates regular semiannual payments be made over the next three years. Prepare the full amortization schedule for the loan. Calculate the t

> Gurwinder borrowed $2800 from his brother to purchase a 2005 Subaru Impreza. He agreed to repay the loan, with 2.5% interest compounding quarterly, in four quarterly payments. Construct the full amortization schedule for the loan. Calculate the total int

> Evaluate expression for the given values of the variables. Calculate the result accurate to the nearest cent. (1 + i)m – 1 for i = 0.0225, m = 4

> Using the Loan Amortization Chart An interactive Loan Amortization Chart is provided on Connect. In Student Edition, find “Amortizing Loan Calculator.” The chart has data boxes in which you enter values for key variables. You can either enter the “Loan a

> Jean and Walter Pereira financed the addition of a swimming pool using a $24,000 home improvement loan from their bank. Monthly payments of $500 (except for a smaller final payment) include interest at 7.2% compounded semiannually. Construct a partial am

> Dr. Alvano borrowed $8000 at 8% compounded quarterly to purchase a new X-ray machine for his clinic. The agreement requires quarterly payments during a two-year amortization period. Prepare the full amortization schedule for the loan. Calculate the total

> Cloverdale Nurseries obtained a $60,000 loan at 7.5% compounded monthly to build an additional greenhouse. Construct a partial amortization schedule for payments of $1000 per month (except for a smaller final payment) showing details of the first two pay

> Suppose that the loan in Problem 16 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $10,000 with the second scheduled payment. How much interest is saved as

> Suppose that the loan in Problem 6 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $1000 with the third scheduled payment. Data from Problem 6: Dr. Alvano b

> Valley Produce received $50,000 in vendor financing at 7.8% compounded semiannually for the purchase of harvesting machinery. The contract requires annual payments of $10,000 (except for a smaller final payment). Construct the complete amortization sched

> Golden Dragon Restaurant obtained a $9000 loan at 9% compounded annually to replace some kitchen equipment. Prepare a complete amortization schedule if payments of $1800 (except for a smaller final payment) are made semiannually.

> Jean and Walter Pereira financed the addition of a swimming pool using a $24,000 home improvement loan from their bank. Monthly payments were based on an interest rate of 7.2% compounded semiannually and a five-year amortization. Construct a partial amor

> Cloverdale Nurseries obtained a $60,000 loan at 7.5% compounded monthly to build an additional greenhouse. Monthly payments were calculated to amortize the loan over six years. Construct a partial amortization schedule showing details of the first two pa

> Evaluate values of the variables. Calculate the result accurate to the nearest cent. 15g – 9h + $3 for g = $14, h = $15

> Suppose that the loan in Problem 10 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $10,000 with the second scheduled payment. How much interest is saved as

> Suppose that the loan in Problem 2 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $1500 with the third scheduled payment. Data from Problem 2: Dr. Alvano b

> Valley Produce received $50,000 in vendor financing at 7.8% compounded semiannually for the purchase of harvesting machinery. The contract requires equal annual payments for seven years to repay the debt. Construct the amortization schedule for the debt.

> Monica bought a $1250 4K Ultra HD TV for 20% down, with the balance to be paid with interest at 15% compounded monthly in six equal monthly payments. Construct the full amortization schedule for the debt. Calculate the total interest paid.

> Cal Gary has accumulated $600,000 in her RRSP and is about to purchase a 25-year annuity from which she will receive month-end payments. The money used to purchase the annuity will earn 4.8% compounded monthly. 1. What will be the monthly payment without

> Petra Borough is about to retire from a government job with a pension that is indexed to the Consumer Price Index (CPI). She is 60 years old and has a life expectancy of 25 years. Estimate the current economic value of her pension, which will start at $2

> Vic Toria (age 65) is about to begin receiving a CPP retirement pension of $11,000 per year. This pension is indexed to the Consumer Price Index (CPI). Assume that the annual pension will be paid in a single year-end payment, the CPI will rise 3% per yea

> Ed Monton is about to buy a 25-year annuity that will deliver end-of-month payments. The first payment will be $1000. How much more will it cost to index the annuity so that payments grow at the rate of 2.4% compounded monthly? Assume the money used to p

> How much will it cost to purchase a 20-year indexed annuity in which the end-of-quarter payments start at $5000 and grow by 0.5% every quarter? Assume that the money used to purchase the annuity earns 6% compounded quarterly.

> Simplify and collect the like terms. k ( 1 + 0.04 ) 2 + 2 k ( 1 + 0.04 ) 2

> Randall wants to accumulate $750,000 in his RRSP by the end of his 30-year working career. What should be his initial year-end contribution if he intends to increase the contribution by 3% every year and the RRSP earns 10% compounded annually?

> Chantal will make year-end contributions for 30 years to an RRSP earning 8% compounded annually. 1. How much will she have after 30 years if the annual contribution is $2000? 2. How much more will she have after 30 years if she increases the contribution

> Using the Constant-Growth Annuity Chart An interactive chart for the future value of a constant-growth annuity is available on Connect. In Student Edition, find “Constant-Growth Annuity.” The chart has data input boxes in which you can enter values for P

> The dividends on the common shares of Mosco Inc. are forecast to grow at 10% per year for the next five years. Thereafter, the best guess is that the annual dividend will grow at the same 3% annual rate as the nominal GNP. A $2.00 dividend for the past y

> Maritime Bank recently announced that its next semiannual dividend (to be paid six months from now) will be $1.00 per share. A stock analyst’s best estimate for the growth in future dividends is 5% compounded semiannually. 1. If you require a rate of ret

> Suppose year-end contributions to an RRSP start at $3000 and increase by 2.5% per year thereafter. What amount will be in the RRSP after 25 years if the plan earns 9% compounded annually?

> A city sells plots in its cemetery for $1000 plus an amount calculated to provide for the cost of maintaining the grounds in perpetuity. This cost is figured at $25 per plot due at the end of each quarter. If the city can invest the funds to earn 4.8% co

> The alumni association of Seneca College is initiating a one-year drive to raise money for a perpetual scholarship endowment fund. The goal is to offer ten scholarships per year, each worth $5000. 1. How large a fund is required to begin awarding the sch

> An old agreement requires a town to pay $500 per year in perpetuity to the owner of a parcel of land for a water well dug on the property in the 1920s. The well is no longer used, and the town wants to buy out the contract, which has become an administra

> Ranger Oil recently donated $750,000 to the Northern Alberta Institute of Technology (NAIT) to fund (in perpetuity) five annual bursaries for students in Petroleum Engineering Technology. If the first five bursaries are to be awarded immediately, what is

> Simplify and collect the like terms. h ( 1 + 0.055 ) 2 − 3 h ( 1 + 0.055 ) 3

> How much more money is required to fund an ordinary perpetuity than a 30-year ordinary annuity if both pay $5000 quarterly and money can earn 5% compounded quarterly?

> In 1752, the British government converted all of its outstanding bonds to perpetual bonds that paid a fixed interest rate. These bonds paid only the interest every three months—the principal amount of the debt would never be repaid. The perpetual bonds h

> A perpetuity is to pay $10,000 at the end of every six months. How much less money is required to fund the perpetuity if the money can be invested to earn 5% compounded semiannually instead of 4% compounded semiannually?

> What amount is required to fund a perpetuity that pays $10,000 at the beginning of each quarter? The funds can be invested to earn 5% compounded quarterly.

> A legal dispute delayed for 18 months the disbursement of a $500,000 bequest designated to provide quarterly payments in perpetuity to a hospice. While under the jurisdiction of the court, the funds earned interest at the rate of 5% compounded semiannual

> A wealthy benefactor has donated $1,000,000 to establish a perpetuity that will be used to support the operating costs of a local heritage museum scheduled to open in three years’ time. If the funds earn 4.8% compounded monthly, what monthly payments, th

> Mr. Chan has donated $1 million to a college to set up a perpetuity for the purchase of books and journals for a new library to be built and named in his honour. The donation will be invested and earnings will compound for three years, at which time the

> The common shares of Unicorp. are forecast to pay annual dividends of $2 at the end of each of the next five years, followed by dividends of $3 per year in perpetuity. What is the fair market value of the shares if the market requires an 8% annually comp

> What sum of money, invested today in a perpetual fund earning 5.5% compounded semiannually, will sustain quarterly perpetuity payments of $1000 if the first payment is made 1. three months from today? 2. one year from today?

> Mr. O’Connor set up a trust account paying $500 per month in perpetuity to the local SPCA. These payments consume all of the interest earned monthly by the trust. Between what amounts does the balance in the trust account fluctuate if it earns 6% compoun

> Simplify and collect the like terms. P 1 + 0.095 × 5 12 + 2 P ( 1 + 0.095 × 171 365)

> A company’s perpetual preferred shares pay a semiannual dividend of $1.50. The next dividend will be paid tomorrow. 1. At what price would the shares provide an investor with a 4.5% semiannually compounded rate of return? The investor will receive tomorr

> A company’s preferred shares pay a $2 dividend every six months in perpetuity. What is the fair market value of the shares just after payment of a dividend if the dividend yield required by the market on shares of similar risk is 1. 4% compounded semiann

> Mrs. O’Reilly donated $500,000 to Medicine Hat College for a perpetual scholarship fund for women in business studies. What amount can be awarded on each anniversary, if the scholarship fund earns 4 1 2 % compounded annually?

> Marion’s grandfather’s will established a trust that will pay her $1500 every three months for 11 years. The first payment will be made six years from now, when she turns 19. If money is worth 6.5% compounded quarterly, what is today’s economic value of

> Mr. Haddit plans to retire eight years from today. He projects that he will need $30,000 per year in his retirement, which he assumes will be for 15 years. The first payment will be nine years from today. To fund his retirement, Mr. Haddit will invest a

> A loan granted today will be repaid by payments of $500 per month running for 3 1 2 years. The first payment is due 2 years and 10 months from today. What amount was borrowed if the interest rate on the loan is 9% compounded quarterly?

> The first quarterly payment of $750 in a five-year annuity will be paid 3 3 4 years from now. Based on a discount rate of 8.25% compounded monthly, what is present value of the payments today?

> A deferred annuity consists of an ordinary annuity paying $2000 semiannually for a 10-year term after a 5-year period of deferral. Calculate the deferred annuity’s present value using a discount rate of 4% compounded quarterly.

> What amount of money invested now will provide monthly payments of $200 for five years, if the ordinary annuity is deferred for 3 1 2 years and the money earns 7.5% compounded monthly?

> Duncan retired recently and plans to utilize other savings for a few years while his RRSP continues to grow on a tax-deferred basis. The RRSP is currently worth $142,470. How long will it be until the amount in the RRSP is large enough to purchase a 25-y

> Simplify and collect the like terms. y ( 1 − 0.125 × 213 365 ) + 2 y 1 + 0.125   ×   88 365

> What minimum initial amount of money, invested to earn 4% compounded monthly, will support a monthly payout of $500 for 3 1 2 years if the first payment occurs 2 years and 10 months from now?

> For how long (before the beginning of the term of the annuity) must a $19,665 investment earning 3.5% compounded semiannually be allowed to grow before it can provide 60 quarterly withdrawals of $1000?

> An investor purchased a deferred annuity contract for $4608.07, a price calculated to provide a rate of return on investment of 9.75% compounded monthly. The semiannual payments of $400, once started, continue for a term of 15 years. How long is the peri

> Sabrina borrowed $30,000 at an interest rate of 7% compounded quarterly. Monthly payments of $356.83 will commence after a period of deferral and will pay off the loan over the subsequent 12 1 2 years. What is the length of the period of deferral?

> To sell a farm that it had acquired in a foreclosure action, the RBC Royal Bank agreed to monthly payments of $2700 for 20 years, with the first payment due 15 months from the date of sale. If the purchaser paid 15% down and the interest rate on the bala

> What is the current economic value of an inheritance that will pay $2000 to the beneficiary at the beginning of every three months for 20 years, starting when the beneficiary reaches 20 years of age, 4 1 2 years from now? Assume that money is worth 6% co

> What amount must be invested today to provide for quarterly payments of $2500 at the end of every quarter for 15 years after a six-year deferral period? Assume that the funds will earn 5% compounded semiannually.

> Mr. Donatelli moved from Toronto to Winnipeg to take a job promotion. After selling their Toronto home and buying a home in Winnipeg, the Donatellis have $85,000 in cash on hand. If the funds are used to purchase a deferred annuity from a life insurance

> Mrs. Corriveau has just retired at age 58 with $160,360 in her RRSP. She plans to live off other savings for a few years and allow her RRSP to continue to grow on a tax-deferred basis until there is an amount sufficient to purchase a 25-year annuity payi

> A $10,000 investment will be allowed to grow at 4.5% compounded semiannually until it can support semiannual withdrawals of $1000 for 20 years. Rounded to the nearest month, how long before the first withdrawal must the investment be allowed to grow?

> Simplify and collect the like terms. 8 x 0.5 + 5.5 x 11 + 0.5 ( 4.6 x − 17 )

> Vencap Enterprises is evaluating an investment opportunity that can be purchased for $55,000. Further product development will require contributions of $30,000 in Year 1 and $10,000 in Year 2. Returns of $20,000, $60,000, and $40,000 are expected in the