MCF3M Name: ______________________

UNIT 5: SOLVING FINANICAL PROBLEMS ASSIGNMENT

Knowledge: /7 Application: /7 Communication: /4 Thinking: /3
Be sure to include the FORMULA in your solution and GIVEN INFORMATION.

I = Prt A=I+P A = P(1 + rt) A = P(1 + i)n I=A–P

I = A – (Rn) I = Rn - PV

Knowledge 7 marks

1. Complete the table. Show all your work to receive full marks. Be sure to include appropriate units.
[3 marks]
Simple
Principal ($) Interest Rate Time Interest Earned ($) Total Amount ($)
(per year)
1300 2.1 % 24 months

2. An investment earns 10% per year for 5 years. Determine i and n under each type of compounding.
[4 marks]
Compounding Period Interest rate, i Time, n

a) Annual

b) Semi-annual

c) Quarterly

d) Monthly
MCF3M Name: ______________________

Application 7 marks

1. Gwen has $12 000 to invest in an account for 5 years. The bank will give her 7%/a interest compounded
annually. How much will Gwen have at the end of the 5 years? Round your answer to the nearest cent.
[3 marks]

2. Sula has contributed $50 to an RRSP at the end of each week for the past 30 years. During this time, the
RRSP has earned an average of 13%/a compounded weekly.

a) How much is RRSP worth today? [3 marks]

b) How much interest was earned? [1 mark]

MCF3M Name: ______________________

Communication 4 marks

1. What is a mutual fund? What is a GIC? What advantage does one have over the other? [4 marks]

Thinking 3 marks

Multiple Choice: Circle the correct answer.

1. Jaime uses the formula to determine how much he will have to invest now to
accrue $9850. For how many years does he plan to keep the money invested?

a. 6 c. 12
b. 10 d. 72

2. Ahmed used a total of $2122.27 over several months to repay a simple interest loan with a 5% interest
rate that he had borrowed four years ago. What was the original amount of the loan?

a. $2546.72 c. $2193.01
b. $1697.82 d. $1768.56

3. The present value of the last payment of an annuity is $4000(1 + .075/4) -24. If the annuity earns 7.5%/a,
for how many years will the payments be made?

a. 2 c. 6
b. 12 d. 24