Question: Mr. Palmer wants to retire in 20

> Use the formula Vf = Vi(1 + c1)(1 + c2)(1 + c3) to determine c2 if Vf = $586.64, Vi = $500, c1 = 0.17, and c3 = 0.09.

> Use Formula (5-2), N = L(1 – d1)(1 – d2)(1 – d3), to calculate d2 if N = $324.30, L = $498, d1 = 0.20, and d3 = 0.075. Data from Formula 5-2: N = L(1 − d1)(1 − d2)(1 − d3)

> Solve the following equations for x to five-figure accuracy and verify the solution. 1. x 1.08 3 + x 2 ( 1.08 ) 4 = $ 850 2. 2 x ( 1 + 0.085 × 77 365 ) + x 1 + 0.085 × 132 365 = $ 1565.70

> Solve the following equations for x to five-figure accuracy. 1. 2 x 1 + 0.13 × 92 365 + x ( 1 + 0.13 × 59 365 ) = $ 831 2. 3 x ( 1.03 5 ) + x 1.03 3 + x = $ 2500 1.03 2

> Evaluate the following expressions to six-figure accuracy. 1. ( 1.00 6 ¯ ) 240 − 1 0.00 6 ¯ 2. (1 + 0.025)1/3 – 1

> Use I = Prt, to calculate P if r = 0.05, I = $6.25, and t = 0.25.

> Multiply and collect the like terms: 4(3a + 2b) – 5a(2 – b)

> The fiscal year for Pine Valley Skiing Ltd., the owner of a downhill skiing facility, ends on June 30. The company began the recently completed fiscal year with its summer maintenance crew of seven employees. During the fiscal year, employees were hired

> Anthony began the year with $96,400 already invested in his Snow ’n Ice retail store. He withdrew $14,200 on March 1 and another $21,800 on April 1. On August 1, he invested $23,700, and on November 1, he contributed another $19,300. What was his average

> One year ago Helga allocated the funds in her portfolio among five securities in the amounts listed in the following table. The rate of return on each security for the year is given in the third column of the table. Calculate the average rate of return f

> Ms. Yong invested a total of $73,400 in three mutual funds as shown in the following table. The third column shows the change in value of each fund during the subsequent six months. What was the percent change in value of Ms. Yong’s ove

> Souvenirs and Such” is a gift shop in Niagara Falls. Last year 22% of its revenue came from the sale of clothing, 18% from food items, 32% from novelty items, and the remainder from special services the shop provided for tourists. This past year the shop

> Havel signed a listing agreement with a real estate agent. The commission rate is 4% on the first $200,000 of the selling price, and 2.5% on the remainder. 1. What commission will Havel pay if he sells his home for $289,000? 2. What is the average commis

> Lauren’s gross pay for July was $3188.35 on net sales totaling $88,630. If her base salary is $1000 per month, what is her rate of commission on sales exceeding her monthly quota of $40,000?

> Marion receives a monthly base salary of $1000. On the first $10,000 of sales above her monthly quota of $20,000, she is paid a commission of 8%. On any additional sales, the commission rate is 10%. What were her gross earnings for the month of August, i

> Sonja is paid $42.50 per hour as a veterinarian. She is paid 1 1 2 times the regular rate for all time exceeding 7 1 2 hours in a day or 37 1 2 hours per week. Work on a statutory holiday is paid at double time. What were her gross earnings for a week i

> Solve the equations. 8 – 0.5(x + 3) = 0.25(x – 1)

> Istvan earns an annual salary of $61,000 as an executive with a provincial utility. He is paid biweekly. During a strike, he worked 33 hours more than the regular 75 hours for a two-week pay period. What was his gross pay for that period if the company a

> Luther is paid an annual salary of $56,600 based on a 37.5-hour workweek. 1. What is his equivalent hourly wage? (Assume that a year has exactly 52 weeks.) 2. What would be his total remuneration for a biweekly pay period of that year if he worked 4.5 ho

> Renalda sold Westel stock that she purchased at $2.20 per share one year ago for a 35% gain. At what price did she sell the stock?

> The profit forecast for the most recent fiscal quarter is $23,400. The actual profit is 90% of the forecast profit. What is the actual profit?

> Two equal payments, 50 days and 150 days after the date of the loan, paid off a $3000 loan at 10 1 4 % . What was the amount of each payment?

> A $1000 loan at 5.5% was repaid by two equal payments made 30 days and 60 days after the date of the loan. Determine the amount of each payment.

> A $3000 loan on March 1 was repaid by payments of $500 on March 31, $1000 on June 15, and a final payment on August 31. What was the third payment if the interest rate on the loan was 8 1 4 % ?

> The interest rate on a $3000 loan advanced on March 1 was 5.2%. What must the first payment on April 13 be in order that two subsequent payments of $1100 on May 27 and $1100 on July 13 settle the loan?

> $5000 was borrowed at 9 1 2 % on March 1. On April 1 and June 1, the borrower made payments of $2000 each. What payment was required on August 1 to pay off the loan’s balance?

> A $3000 loan at 6% was made on March 1. Two payments of $1000 each were made on May 1 and June 1. What payment on July 1 will pay off the loan?

> Solve the equations. 3y – 4 = 3(y + 6) – 2(y + 3)

> A capital project would require an immediate investment of $150,000 and a further investment of $40,000 on a date four years from now. On the operating side, the project is expected to lose $30,000 in the first year and $10,000 in the second, to break ev

> A mortgagee wishes to sell his interest in a closed mortgage contract that was written 21 months ago. The original loan was for $60,000 at 6.8% compounded semiannually for a five-year term. Monthly payments are being made on a 20-year amortization schedu

> The vendor of a property agrees to take back a $55,000 mortgage at a rate of 7.5% compounded semiannually with monthly payments of $500 for a two-year term. Calculate the market value of the mortgage if financial institutions are charging 9.5% compounded

> The vendor of a residential property accepted a $40,000 take-back mortgage to facilitate the sale. The agreement calls for quarterly payments to amortize the loan over 10 years at an interest rate of 7% compounded semiannually. What was the cash value (o

> Calculate the effective annual cost of borrowing for each of the following three financing alternatives. All interest rates are for a seven-year term and all mortgages use a 20-year amortization to calculate the monthly payments. Bank B will lend $90,000

> A borrower has the choice between two mortgage loans. Both are to be amortized by monthly payments over 10 years. A mortgage broker will charge a fee of $2200 for an $82,200 face value loan at 10.25% compounded semiannually. A trust company will grant an

> A local mortgage broker has arranged a mortgage loan with a face value of $77,500, which included a finder’s fee of $2500. The loan is to be amortized by monthly payments over 20 years at 7% compounded semiannually. What is the actual cost of borrowing,

> A borrower has arranged a $105,000 face value, bonused mortgage loan with a broker at an interest rate of 10.8% compounded semiannually. Monthly payments are based on a 15-year amortization. A $5000 placement fee will be retained by the broker. What is t

> A mortgage loan having a face value of $63,000 is arranged by a mortgage broker. From this face value, the broker deducted her fee of $3000. The mortgage is written at a contract rate of 8% compounded semiannually for a five-year term. Monthly payments a

> A $75,000 mortgage loan at 9% compounded semiannually has a five-year term and a 25-year amortization. Prepayment of the loan at any time within the first five years leads to a penalty equal to the greater of 1. three months’ interest on the balance. 2.

> The Phams are almost two years into the first five-year term of a 25-year $80,000 mortgage loan at 7.5% compounded semiannually. Interest rates on three-year term mortgage loans are now 6% compounded semiannually. A job transfer necessitates the sale of

> Solve the equations. 12x – 4(2x – 1) = 6(x + 1) – 3

> You are interested in purchasing a house listed for $180,000. The owner seems quite determined to stay at the asking price, but you think that the true market value is $165,000. It may be that the owner would accept an offer whose nominal value is the ps

> The owner of a property listed at $145,000 is considering two offers. Offer C is for $140,000 cash. Offer M is for $50,000 cash and a mortgage back to the vendor for $100,000 at a rate of 8% compounded semiannually and payments of $750 per month for the

> What is the equivalent cash value of the offer if the vendor financing arrangement is for the same 10-year amortization but with 1. a five-year term? 2. a one-year term?

> A property is listed for $175,000. A potential purchaser makes an offer of $170,000, consisting of $75,000 cash and a $95,000 mortgage back to the vendor bearing interest at 8% compounded semiannually with monthly payments for a 10-year term and a 10-yea

> An investor is considering the purchase of an existing closed mortgage that was written 20 months ago to secure a $45,000 loan at 10% compounded semiannually paying $500 per month for a four-year term. What price should the investor pay for the mortgage

> The Gills have arranged a second mortgage loan with a face value of $21,500 at an interest rate of 6.5% compounded monthly. The face value is to be fully amortized by equal monthly payments over a five-year period. The Gills received only $20,000 of the

> If Gayle contributes $1000 to her RRSP at the end of every quarter for the next 10 years and then contributes $1000 at each month’s end for the subsequent 15 years, how much will she have in her RRSP at the end of the 25 years? Assume that the RRSP earns

> Canadian Pacific Class B preferred shares have just paid their quarterly $1.00 dividend and are trading on the Toronto Stock Exchange at $50. What will the price of the shares have to be three years from now for a current buyer of the shares to earn 7% c

> Interprovincial Distributors Ltd. is planning to open a distribution centre in Calgary in five years. It can purchase suitable land now for the distribution warehouse for $450,000. Annual taxes on the vacant land, payable at the end of each year, would b

> Solve the equations. x – 0.025x = 341.25

> Natalie’s RRSP is currently worth $133,000. She plans to contribute for another seven years, and then let the plan continue to grow through internal earnings for an additional three years. If the RRSP earns 5.25% compounded annually, how much must she co

> What amount is required to purchase an annuity that pays $5000 at the end of each quarter for the first 10 years and then pays $2500 at the beginning of each month for the subsequent 10 years? The rate of return on the invested funds is 6% compounded qua

> Sheila already has $67,000 in her RRSP. How much longer must she contribute $4000 at the end of every six months to accumulate a total of $500,000 if the RRSP earns 5% compounded quarterly? (Round the time required to the next higher month.)

> Martha’s RRSP is currently worth $97,000. She plans to contribute $5000 at the beginning of every six months until she reaches age 58, 12 years from now. Then she intends to use half of the funds in the RRSP to purchase a 20-year annuity making month-end

> The monthly payments on a $30,000 loan at 10.5% compounded monthly were calculated to repay the loan over a 10-year period. After 32 payments were made, the borrower became unemployed and, with the approval of the lender, missed the next three payments.

> RentalTown advertised a television at a cash price of $599.99 and at a rent-to-own rate of $14.79 at the beginning of each week for 78 weeks. What effective rate of interest is a customer paying to acquire the television in a rent-to-own transaction? (As

> A major car manufacturer is developing a promotion offering new car buyers the choice between “below market” four-year financing at 1.9% compounded monthly or a cash rebate. On the purchase of a $35,000 car, what cash rebate would make a car buyer indiff

> Cynthia currently has $55,000 in her RRSP. She plans to contribute $7000 at the end of each year for the next 17 years and then use the accumulated funds to purchase a 20-year annuity making end-of-month payments. 1. Assume that her RRSP earns 8.75% comp

> Reg is developing a financial plan that would enable him to retire 30 years from now at age 60. Upon reaching age 60, he will use some of the funds in his RRSP to purchase an eight-year annuity that pays $5000 at the end of each month. Then, at age 68, h

> Patrick contributes $1000 at the beginning of every quarter to his RRSP. In addition, he contributes another $2000 to the RRSP each year from his year-end bonus. If the RRSP earns 9.5% compounded semiannually, what will be the value of his RRSP after 23

> Solve the equations. y = 192 + 0.04y

> For its “Tenth Anniversary Salebration,” Pioneer Furniture is offering terms of 10% down, no interest, and no payments for six months. The balance must then be paid in six equal payments, with the first payment due six months after the purchase date. The

> To compensate for the effects of inflation during their retirement years, the Pelyks intend to purchase a combination of annuities that will provide the following pattern of month-end income: Rounded to the nearest dollar, how much will they need in thei

> The average annual costs to support a child born today are estimated as follows: Years 1–6: $12,000 Years 7–12: 11,000 Years 13–17: 10,000 Years 18–19: 15,000 The costs in the early years include child care expenses or forgone earnings of the caregiving

> Jeanette wishes to retire in 30 years at age 55 with retirement savings that have the purchasing power of $300,000 in today’s dollars. 1. If the rate of inflation for the next 30 years is 2% per year, how much must she accumulate in her RRSP? 2. If she c

> Conrad has two loans outstanding, which he can repay at any time. He has just made the 11th monthly payment on an $8500 loan at 10.5% compounded monthly for a three-year term. The 22nd monthly payment of $313.69 was also made today on the second loan, wh

> It will cost A-1 Courier $1300 to convert a van from gasoline to natural gas fuel. The remaining useful life of the van is estimated at five years. To financially justify the conversion, what must be the reduction in the monthly cost of fuel to repay the

> Monthly payments were originally calculated to repay a $20,000 loan at 7% compounded monthly over a 10-year period. After one year, the debtor took advantage of an option in the loan contract to increase the loan payments by 15%. How much sooner will the

> Seth had accumulated Canada Student Loans totalling $5200 by the time he graduated from Mount Royal College in May. He arranged with the National Student Loans Service Centre to select the floating-rate option (at prime plus 2 1 2 % ), to capitalize the

> Kari had Canada Student Loans totalling $3800 when she completed her program at Niagara College in December. She had enough savings at the end of June to pay the interest that had accrued during the six-month grace period. Kari made arrangements with the

> Monica finished her program at New Brunswick Community College on June 3 with Canada Student Loans totalling $6800. She decided to capitalize the interest that accrued (at prime plus 2.5%) during the grace period. In addition to regular end-of-month paym

> Solve the equations. 1 3 ( x − 2 ) = 4

> Harjap completed his program at Nova Scotia Community College in December. On June 30, he paid all of the interest that had accrued (at prime plus 2.5%) on his $5800 Canada Student Loan during the six-month grace period. He selected the fixed-rate option

> Sarah’s Canada Student Loans totalled $9400 by the time she graduated from Georgian College in May. She arranged to capitalize the interest on November 30 and to begin monthly payments of $135 on December 31. Sarah elected the floating rate interest opti

> Bronwyn’s $15,000 line of credit is at prime plus 2.5%. The minimum payment (the greater of $100 or 3% of the combined principal and accrued interest) is automatically deducted from her chequing account on the 15th of each month. After the payment on Aug

> Benjamin has a $20,000 personal line of credit at prime plus 2% with his credit union. His minimum end-of-month payment is the greater of $100 or 3% of the combined principal and accrued interest. After his payment on April 30, his balance was $3046.33.

> Hercules Sports obtained a $60,000 operating line of credit on March 26. Interest charges at the rate of prime plus 3.5% were deducted from its chequing account on the 18th of each month. Hercules took an initial draw of $30,000 on March 31, when the pri

> Shoreline Yachts has a $1 million line of credit with the RBC Royal Bank, secured by its inventory of sailboats. Interest is charged at the floating (naturally!) rate of prime plus 2% on the 10th of each month. On February 10 (of a non–leap year), the lo

> Scotiabank approved a $75,000 line of credit for Curved Comfort Furniture on the security of its accounts receivable. Curved Comfort drew down $30,000 on October 7, another $15,000 on November 24, and $20,000 on December 23. The bank debited interest at

> On the June 12 interest payment date, the outstanding balance on Delta Nurseries’ revolving loan was $65,000. The floating interest rate on the loan stood at 6.25% on June 12, but rose to 6.5% on July 3, and to 7% on July 29. If Delta made principal paym

> McKenzie Wood Products negotiated a $200,000 revolving line of credit with the Bank of Montreal at prime plus 2%. On the 20th of each month, interest is calculated (up to but not including the 20th) and deducted from the company’s chequing account. If th

> Mr. Michaluk has a $50,000 personal (revolving) line of credit with the Canadian Imperial Bank of Commerce (CIBC). The loan is on a demand basis at a floating rate of prime plus 1.5%. On the 15th of each month, a payment equal to the greater of $100 or 3

> Solve the equations. 0.5(x – 3) = 20

> Dr. Chan obtained a $15,000 demand loan at prime plus 1.5% on September 13 from the Bank of Montreal to purchase a new dental X-ray machine. Fixed payments of $700 will be deducted from the dentist’s chequing account on the 20th of each month, beginning

> Beth borrowed $5000 on demand from TD Canada Trust on February 23 for an RRSP (Registered Retirement Savings Plan) contribution. Because she used the loan proceeds to purchase the bank’s mutual funds for her RRSP, she received a special interest rate of

> Donia borrowed $7000 from her credit union on a demand loan on July 20 to purchase a motorcycle. The terms of the loan require fixed monthly payments of $1400 on the first day of each month, beginning September 1. The floating rate on the loan is prime p

> Giovando, Lindstrom & Co. obtained a $6000 demand loan at prime plus 1.5% on April 1 to purchase new office furniture. The company agreed to fixed monthly payments of $1000 on the first of each month, beginning May 1. Calculate the total interest charges

> A $5000 demand loan was advanced on June 3. Fixed monthly payments of $1000 were required on the first day of each month beginning July 1. Prepare the full repayment schedule for the loan. Assume that the interest rate remained at 8.75% for the life of t

> Dr. Robillard obtained a $75,000 operating line of credit at prime plus 3%. Accrued interest up to but not including the last day of the month is deducted from his bank account on the last day of each month. On February 5 (of a leap year) he received the

> Anthony borrowed $7500 on September 15 and agreed to repay the loan by three equal payments on the following November 10, December 30, and February 28. Calculate the payment size if the interest rate on the loan was 11 3 4 % . Use September 15 as the foc

> A loan of $4000 at 6.25% is to be repaid by three equal payments due four, six, and eight months after the date on which the money was advanced. Calculate the amount of each payment. Use the loan date as the focal date.

> A loan of $10,000 is to be repaid by three payments of $2500 due in two, four, and six months, and a fourth payment due in eight months. What should be the size of the fourth payment if an interest rate of 11% is charged on the loan? Use today as the foc

> Maurice borrowed $6000 from Heidi on April 23 and agreed to make payments of $2000 on June 1 and $2000 on August 1, and to pay the balance on October 1. If simple interest at the rate of 5% was charged on the loan, what is the amount of the third payment

> Solve the equations. x 1 + 0.115 × 78 365 + 3 x ( 1 + 0.115 × 121 365 ) = $1000 ( 1 + 0.115 × 43 365 )

> A $7500 loan will be paid off by four equal payments to be made 2, 5, 9, and 12 months after the date of the loan. What is the amount of each payment if the interest rate on the loan is 9.9%?

> The simple interest rate on a $5000 loan is 7%. The loan is to be repaid by four equal payments on dates 100, 150, 200, and 250 days from the date on which the loan was advanced. What is the amount of each payment?

> $8000 was borrowed at an interest rate of 11 1 2 % . Calculate the amount of each payment if the loan was paid off by three equal payments made 30, 90, and 150 days after the date of the loan.

> What should be the amount of each payment if a $2500 loan at 3.5% is to be repaid by three equal payments due two months, four months, and seven months following the date of the loan?

> If the S&P/TSX Composite Index declined from 14,614 to 14,238 over a 50-day period, what were the simple and effective annualized rates of decline in the index during the period?

> If the money supply increased from $331.12 billion to $333.81 billion in a single month, what were the simple and effective annualized rates of increase in the money supply during the month?