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- Question
Assume that money can be invested at 8% compounded quarterly,which is larger,$2500 now or $3800 in 5 years?
Options- A. 1557.29
- B. 2557.29
- C. 2567
- D. 2457
- Correct Answer
- 2557.29
ExplanationFirst find the present value of $3800,then compare present values:
M = p(1+i/4)^4n
- 1. Calculate the future value of $3,000 invested at 7% for 5 years
Options- A. 4207.66
- B. 5207
- C. 4376
- D. 5687 Discuss
- 2. If you deposit $5000 into an account paying 6% annual interest compounded monthly, how long until there is $8000 in the account?
Options- A. 6.9
- B. 7.9
- C. 8.9
- D. 9.9 Discuss
- 3. The difference between the compound interest and simple interest on an amount of Rs.15000 for two years is Rs.96. what is the rate of interest per annum
Options- A. 8
- B. 10
- C. 12
- D. 13 Discuss
- 4. If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what is the compound interest on the same at the same rate and for the same time?
Options- A. Rs.51.25
- B. Rs.52
- C. Rs.53
- D. Rs.54 Discuss
- 5. Albert invested an amount of Rs.8000 in a fixed deposit scheme for 2 years at compound interest rate 5 p.c.p.a. How much amount will Albert get on maturity of the fixed deposit ?
Options- A. Rs.8600
- B. Rs.8830
- C. Rs.8500
- D. Rs.8820 Discuss
- 6. The periodic interest rate corresponding to: 9.75% compounded semiannually
Options- A. 4.875
- B. 3.785
- C. 4.865
- D. 4.975 Discuss
- 7. Two payments of $10,000 each must be made one year and four years from now. If money can earn 9% compounded monthly, what single payment two years from now would be equivalent to the two scheduled payments?
Options- A. 19296
- B. 19396
- C. 19496
- D. 19596 Discuss
- 8. A chartered bank offers a five-year Escalator Guaranteed Investment Certificate.In successive years it pays annual interest rates of 4%, 4.5%, 5%, 5.5%, and 6%, respectively, compounded at the end of each year. The bank also offers regular five-year GICs paying a fixed rate of 5% compounded annually. Calculate and compare the maturity values of $1000 invested in each type of GIC. (Note that 5% is the average of the five successive one-year rates paid on the Escalator GIC.)
Options- A. 1276.28
- B. 1234
- C. 1278
- D. 1256 Discuss
- 9. If the rate of inflation for the next 20 years is 2.5% per year, what annual income will be needed 20 years from now to have the same purchasing power as a $30,000 annual income today?
Options- A. 39158
- B. 49158
- C. 59158
- D. 69158 Discuss
- 10. Payments of $2000 and $1000 were originally scheduled to be paid one year and five years, respectively, from today. They are to be replaced by a $1500 payment due four years from today, and another payment due two years from today. The replacement stream must be economically equivalent to the scheduled stream. What is the unknown payment, if money can earn 7% compounded semiannually?
Options- A. 1548
- B. 1348
- C. 1648
- D. 1748 Discuss
Compound Interest problems
Search Results
Correct Answer: 4207.66
Explanation:
F=P(1+i)^n
Correct Answer: 7.9
Explanation:
FV=P(1+r/n)^nt
Correct Answer: 8
Explanation:
[15000 *(1+r/100)^2-15000]-(15000*r*2)/100=96
r=8
Correct Answer: Rs.51.25
Explanation:
Sum =Rs.(50 x 100/2x5)
= Rs. 500.
Amount
=[Rs.500x(1+5/100)²]
=Rs(500x21/20x21/20).
=Rs. 551.25
C.I
= Rs. (551.25 - 500)
= Rs. 51.25
Correct Answer: Rs.8820
Explanation:
Amount
=Rs.[8000x(1+5/100)²]
= Rs.[8000 x 21/20x21/20]
= Rs.8820.
Correct Answer: 4.875
Explanation:
i=j/m
Correct Answer: 19296
Explanation:
The single equivalent payment will be PV + FV.
FV = Future value of $10,000, 12 months later
$10,000 *(1.0075)/12
$10,938.07
PV= Present value of $10,000, 24 months earlier
$10,000/(1.0075)24
$8358.31
The equivalent single payment is
$10,938.07 + $8358.31 = $19,296.38
Correct Answer: 1276.28
Explanation:
FV = $1000(1.04)(1.045)(1.05)(1.055)(1.06) = $1276.14
the maturity value of the regular GIC is
FV = $ 1000 x = $1276.28
Correct Answer: 49158
Explanation:
i=j/m
FV = PV(1+ i)^n
Correct Answer: 1648
Explanation:
FV1 = Future value of $2000, 1 year later
= PV (1+ i)^n
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