1. A LOAN OF $6000 AT 8% IS COMPOUNDED SEMIANNUALLY FOR THREE YEARS. FIND THE FUTURE VALUE AND COMPOUND INTEREST. USE THE $1.00 FUTURE VALUE TABLE OR THE FUTURE VALUE COMPLUND INTEREST FORMULA.
The future value of the loan is $___________________________ (Round to the nearest cent as needed).
2. AN INVESTMENT OF $9000 AT 3% IS COMPOUNDED SEMIANNUALLY FOR FIVE YEARS. FIND THE FUTURE VALUE AND COMPOUND INTEREST. USE THE $1.00 VALUE TABLE OR THE FUTURE VALUE AND COMPOUND INTEREST FORMULA.
The future value of the investment is $____________________________. (Round to the nearest cent as needed.)
3. A LOAN OF $1000 AT 24% IS COMPOUNDED MONTHLY FOR TWO YEARS. FIND THE FUTURE VALUE AND COMPOUND INTEREST. USE THE $1 FUTURE VALUE TABLE OR THE FUTURE VALUE AND COMPOUND INTEREST FORMULA
The future value of the loan is $_____________________________. (Round to the nearest cent as needed.)
4. A business person invests $4,831at 3% compounded semiannually for two years. What is the future value of the investment, and how much interest will they earn over the two-year period?
What is the future value of the investment? (Round to the nearest cent as needed.)
5. Tom Bond borrowed $6,600 at 8.5% for three years compounded annually. What is the compound amount of the loan and how much interest will he pay on the loan?
Compound amount = $_____________. (Round to the nearest cent as needed.)
6. John Smith has $9,000 that he plans to invest in a compound-interest bearing instrument. His investment agent advised him that he can invest the $9,000 at 10% compounded quarterly for three years or he can invest the $9,000 at 10 ¼% compounded annually for three years. Which investment should John Smith choose to receive the most interest? Use the $1.00 future table or the future value and compound interest formula.
Choose the correct answer below.
A, 10% quarterly is the better deal
B. 10 ¼% annually is the better deal
C. Both investments give equal interest.
Find the amount that should be set aside today to yield the desired future amount.
Future amount needed Interest rate Compounding period Investment time
$ 9 comma 000$9,000 2424%
semiannuallysemiannually 22
years
7. Find the amount that should be set aside today to yield the desired future amount.
Future amount needed Interest rate Compound period semiannually Investment time
$9,000 24% semiannually 2 years
See the attached icon to the view the present value of $1.00 table.
The present value is $______________. (Round to the nearest cent as needed.)
8. Compute the amount of money to be set aside today to ensure a future value of $4,100
in one year if the interest rate is 8.5% annually, compounded annually.
The amount of money to be set aside is $________________. (Round to the nearest cent as needed).
9. Present value takes an amount in the future and calculates the value needed to invest today to yield that amount. Is this statement true or false?
10. Use the accompanying table to find the compound interest. Round to the nearest cent.
$ 20,000 at 6% compounded semiannually for 12 years
A.
$20,243.93
B.
$14,400.00
C.
$20,655.80
D.
$8,515.22
Answer will be sent by email as attachment.
