Mathematics of Finance

BMT-101, Business Mathematics-I

Course Instructor Mozumdar Arifa Ahmed

1. Find the interest rate of $1000 earns $45 interest in 6 months.

2. Find the exact and ordinary interest on $2190 for 75 days at 12% interest.

3. Find the future value if $20,000 is invested at 6% for 3 months.

4. Find the present value of $1000 at 9% due 8 months from now.

5. Find the present value and the effective rate of $1000 due in 4 months at 12%
interest.

6. If $500 is invested at 6% compounded annually, what will be the future value 30

years later?

7. At 8% compounded annually, how many years will it take for $2000 to grow to
$3000?

8. At what interest rate compounded annually will a sum of money would be double/
triple in 10 years?

9. What is the present value of $2500 payable 4 years from now at 8% compounded
quarterly/ semiannually?

10. If $100 is deposited in an account each month for 10 years and the account earns
7% compounded monthly; how much will be in the account after the last deposit
is made?

11. If $500 were invested for 8 years at interest rate 6% compounded quarterly, then
what will be the compound interest?

12. An investor has an opportunity to purchase two different notes: Note A pays 15%
compounded monthly and Note B pays 15.2% compounded semiannually. Which
is the better investment?

13. What is the present value of an annuity that pays $200 per month for 5 years if
money is worth 6% compounded monthly?

14. What is the value of an annuity at the end of 20 years if $2000 is deposited each
year into an account earning 8.5 % compounded annually? How much of this
value is interest?

15. How much should you invest now at 10% compounded quarterly to have $8,000
toward the purchase of a car in 5 years?