Quiz I 481 2603674 Theory of Interest June 16,2010 jeried 5391354005 ay. 1. Calculate the nominal rate of discount convertible quarterly that is equivalent to a nominal rate of interest 15% per year convertible semi-annually. 2. Ata nominal rate of i convertible semi-annually, an investment of 18,000 immediately and 10,000 at the end of the first year will accumulate to 30,000 at the end of the second year. Calculate i. 3. Calculate the duration that the money would triple itself if the rate of interest is 12% per year. : 5, ach = keach mye a (Vary a) gk « kant t (ity (dey do (4D : ‘ 4 Ata gto 1 oy Gat). (de \ r) 2 gt 24a (4 meyt 1 dO 7 ; 4” i Ve to. qs ie “ = 4 D4 (1.005% a x qo 1404 aon | = ESSH UIE ell it ‘000 ‘9p00 30p00 my? yp il) + 108 4 t | 2 mn t repo ei) rogao (14 i)" 39000 | i ere T C4 yy sie) es i afaont ea Mies (sty iO) Lg (40n-r) 7 gle gxty sx 15+ 0 | i. Lon or _ xs bt sole | fo aeeeeetpad ! : au | pal elon 97 no. 254 Jos ~ ot x | Bo gna x oe Bp = 2397 | 8 1fmtak vidostowns SIBIBSIM 4; Quiz2 Chapter 3 40 7181 2603674 Theory of Interest Qo! frewsy98s 2000 wn 40 430. 1. A loan is being repaid Wwith 30 annual payments of 3000 each. With the 10" payment, the borrower pays an extra 10000, and then repays the balance over 20 years with a revised annual payment. The effective rate of interest is 10%, Calculate the amount of the revised annual payment. ‘\ % 2. At an annual effective interest rate of i, i>0, both of the following annuities have a present value of X. Jirsaae to08 nodarone 99 9. () 20-year annuity immediate with annual payments of 55 (ii) 2 30-year annuity-immediate with annual payments that pays 30 per year for the first 10 years, 60 per year for the second 10 years, 90 per year for the final 10 years 30 we x eee ceeeyeeeae eee es Calculatg Xi, oe Be te sw, fh +0 3000 a. 5 a «8a. (Hv) yon ae spo 2 a } boa. a . : soy) —O < $8280,1a38 — 550. Oo Peer 5 ° aa “0 “ 3p00 a + tapooy"? = spoo[ sean —]t ac] sa. = Say teova_ aov"a, ea iq 4 3p55, 49194 w ” ei aaa O-@ ; 25 (55+ 55v") « a Usa4 boy's gov") ad = 2apsa.sany —@ i. wg Sy enV «305 boy 4 a0y © -@ sd mnpso.rga4- ages. rsa » 5994.40%19 anv tov”. 55v 50-55 = 0 \ gov rsv"- 25 > 0 6 \ 5AM bowa + HO, |v ye 58 [is acancan Ks 5ag4. bone | 2¢40) av" | 5495 thea | 160 a x aan oma v +a 1 08 [steal] favor] ® ven aii 2 os croln tari) = Into.) ee TBS AGES Inciiy + Ins) 4 _ Incrtiy s O,0b99 ve 7 wie ghee agi ont fs 10074 = 0.0188 2 + 55a «58 [tale oomy Xs s5a5 . 58 [tatreomy =)Gotod witiowsis, GS820590% 5 Quiz3 Chapter 4 (2 3412603674 Theory of Interest D A/S 1. Find the accumulated value of a twenty-year annuity which pays 1000 at the beginning of each quarter for the first 10 years, increasing to 1500 per quarter thereafter. The effective rate of interest is 10%. 491» aan 2. An employee currently is aged 25, decides to deposit $1500 at the end of the first year, $1700 at the end of the second year, $1900 at the end of the third year, .-.» until reaching $3500, After that, he will deposit the amount of $3500 until age 60. How much will be available at age 65 if the fund carn an 8% effective rate of interest? tie @ Pot pie ee arin (+ i) vert pea is a oatik 7 coded « ceeraen 38 causes” d?. afaeaer’} = 4000 fou]: 2000 a(r-an'*y ; O.044Ng = Agoe Wes tet | geo cua | | - 0.0RA18 0.09815 2 Usps 52974 J3844.t05e8 = aNNfor. 1944 ® yee ne6 ayn 20. 50 x be fom sb 40 08 oot ha ow 8 ” yO) yer gee ‘eee x ‘ {poo + 200 (a0) Jou + spond fo" i ” . (ve (aa. atbs4) + 1006 56.08208)](1.08)"? + [5500 (5. row} ct) = (215031, Sues + 255990. 18) (1.05) 107 AB 409 00-4 + s00! at 308dein wierivans neon Interest caste lio 538285902 The. : j Sank sj Lod Case Xie tapoqg00 am Wexhsrim aqooqgo0 anh mutacHet daa tawen A ey +y dnmoinitulnda 12 etl mdunaien i a ‘ Ye tg famoaaRe ten 18 melmudunniden Ge dad 4 Heian > Wssaia 4) \ say ty You 4 4 Fartunen > aah 19! Tui ni. sanvevinatnfen tabavam 15 atl sede, mat 25 1. .25 x agoongao = 800000 «mn ® 1op0op00 - s50qp60 + YSeqpc0 wi 2 8 : wswnanaaiden, 2x45 = 180 rvountachtniden + ‘jpo0gce % + “"pogoo0 Salo X 2 payee 4-4 ory" fe “a Ks 120781.58 sn, \, oy : ¥ WHE WOBLIAY + 120781.58 Soh dan 15, ‘Wo1.58 « 189 + 21740 b84.40 YON iY 4 dug ‘ dls uasvduaowdis nonin on i 2 fo Ye fiom namin sidincedan 2 oy # 7 i Leia . sanvinte awa tvtivdosdnnambin «ore qseqgo0 + gpoe wm fan Peete Eee Rete tag ere ate ‘ Heusuucntvten fusaniluesibensca tata sion aman + $0fe.68 - yyp00 + asye.98 som 4 ! + ASE. [sos] ae devemmits sta as at A il or fogm st faenM1) aw 2 D2RT1510.98 awn te} he) ae -noerindauin daannnitarhudisunaes inatenfodadurte agacagoe wndabnaa hovindionsnsnis 4571.58 san Nardaudslwunacidendunsdlt farhndoudunas’ldaosanens waar wMlecté be enereneste aonfey ; orto itesdosasig Mi nner 53g 205n00b 1000 so ‘ooo O We ie aetna if oo " 120 0 iu ay. Tho : 1s) 7 i 100 A > 1900 + 1000 on _ rotisan” he feo Sta rere kat rr) (eee to 3.08 ee en vee 0.1288 | "4 ef ds 4-v 4 des 4 crtotny Weg “0 : 4 Frama reco f 228884" sacsvons® dsm) wee ferro ngoeO LEC Vegas HR TE ony ey i" spe Leveeant or] moat 429 0 [ #2302 42199 i omy atk = 1200 x BF3NIT 32910.65 to matt 7 Q —2 2 __” is salet on P+Q nti (a x) Kw 4 [ a. fa corsan®] 5 on i [sca : ” 2. orem m oats jee raf creonst 1 b.01944 = 3.2993 ay J > vo [ O11 Vos 0.41386 Xxd x 100 mi + 3530bb.05 = to0Kn! i # 3 14400avo Widastowsd a TD: Sag 2e5a02 Quiz 5 4m 2603674 Theory of Interest ‘ dhs wn Bedisnia 50,99, xfooniall spa desire poyrert 538 1. A loan of 1 Was"originally scheduled to be repaid by 30 equal payments at the end of each year. An extra payment K with each of the 11 through the 15" scheduled payments will be sufficiently to repay the loan 10 years earlier than under the original schedule. Find K. i+ 10+ drbeagen dushatagdsd 2. A borrower is repaying a loan with payments ‘of $10000 at the end of every year over an unknown period of time. If the amount of interest in the 4" installment is $6000, find the amount of principal in the 10" installment. Assume that interest is 12% convertible quarterly. wibséuieislasiaatio \ R= te 1 je Mt. ao, Je e R = tgo00 te 1, = bpoo : ae y= RQ, P, + 1gp0@ - b900 + apa0 Woz bxAe 2h «Mla, * Keates oe Ey Pit Atty) reff, 0 Oa) ob weet i % a = ogo (14-03) ales mor) ‘ = 4000 (1.03) k Been mos ar “alos = goon x 2.052794 K = 8.5156 = 6 14a (4.4004) (3.1807) Ks 0.06624 #