Time Principal (P) Simple Interest Amount after t years Solution Answer (Maturity Value) 1 (5,000) (0.25) (1) 1,250 5,000+1,250=6,250 2 5,000+2,500=7,250 P5,000 3 (5,000) (0.25) (3) 4 5,000 5,000+5,000=10,000 Time Principal Compound Interest Amount aftert years (P) Solution Answer (Maturity Value) 1 (5,000) (0.25) (1) 1,250 5,000 + 1,250 =6,250 2 (6,250) (0.25) (2) P5,000 3 (9,375) (0.25) (3) 9,375+7,031.25=16,406.25 16,406.25 4.

Time Principal (P) Simple Interest Amount after t years Solution Answer (Maturity Value) 1 (5,000) (0.25) (1) 1,250 5,000+1,250=6,250 2 5,000+2,500=7,250 P5,000 3 (5,000) (0.25) (3) 4 5,000 5,000+5,000=10,000 Time Principal Compound Interest Amount aftert years (P) Solution Answer (Maturity Value) 1 (5,000) (0.25) (1) 1,250 5,000 + 1,250 =6,250 2 (6,250) (0.25) (2) P5,000 3 (9,375) (0.25) (3) 9,375+7,031.25=16,406.25 16,406.25 4.

College Algebra

7th Edition

ISBN:9781305115545

Author:James Stewart, Lothar Redlin, Saleem Watson

Publisher:James Stewart, Lothar Redlin, Saleem Watson

Chapter8: Sequences And Series

Section8.4: Mathematics Of Finance

Problem 11E

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Continued This is a continuation of Exercise 13. As we saw earlier, the stock turnover rate of an item is the number of times that the average inventory of the item needs to be replaced as a result of sales in a given time period. Suppose that a hardware store sells 80 shovels each year. a. Suppose that the hardware store maintains an average inventory of 5 shovels. What is the annual stock turnover rate for the shovels? How is this related to the yearly number of orders to the wholesaler needed to restock inventory? b. What would he the annual stock turnover rate if the store maintained an average inventory of 20 shovels? c. Write a formula expressing the annual stock turnover rate as a function of the average inventory of shovels, identify the function and the variable, and state the units.
The S&P 500 is currently at a value of 4,130 (as of July 29th, 2022 market close). On the same day, the Dec 22' S&P 500 futures contracts closed out the day at 4,152.25. These contracts mature on Dec 30th 2022 and thus have exactly 5 months remaining until their maturity. The continuously compounded risk-free rate is 2.50% per annum. The yield on the S&P 500 with continuous compounding is 1.52% per annum. What trade do we need to put on to take advantage of this arbitrage opportunity? O A. There is NO arbitrage opportunity available here. The S&P 500 futures are perfectly priced in line with No Arbitrage. Thus, the right arbitrage trade is to do nothing. O B. Go long the S&P 500 futures, short the S&P 500 Index and invest any excess cash we have at 2.5% interest. O C. Go short the S&P 500 futures, and borrow any money needed at 2.5% to buy the S&P 500 index.
A continuous annuity with withdrawal rate N = $2,000/year and interest rater 2% is funded by an initial deposit Po $99,000? (a) When will the annuity run out of funds if P The annuity runs out after approximately years Answer to the nearest whole year. (b) Which initial deposit Po yields a constant balance? Po $100000
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7) A return of $104,000 (like interest) will be realized on an original investment of $200,000 over a 5-year period. Determine: (4) a) The rate of return using simple interest. b) The rate of return using compound interest (compounded annually), where the Future Value is $304,000.
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7.A certain college graduate borrows $8000 to buy a car. The lender charges interest at an annual rate of 10%. Assuming that interest is compounded continuously and that the borrower makes payments continuously at a constant annual rate k, determine the payment rate k that is required to pay off the loan in 3 years. Also determine how much interest is paid during the 3-year period.
A total of $2,400 is invested into a bond that pays 4.5% interest, compounded monthly, maturing in 9 years. Identify the value of the principal, P, the annual percentage rate APR, and the number of compounding periods per year, n. The principal is The APR is The value of n is The value of Y is
A) Suppose that you borrow $5500 for your first year and $6500 for your second year (the maximum amounts for a dependent student), as federal direct student loans at a 4.29% interest rate. Suppose that each loan begins on September 1 of its year, that you finish college in four years, that you do not pay the accruing interest in the meantime, and that you begin repayment on December 1 after graduation. You also borrow $7500 for each of your third and fourth years, again on September 1, all at a 4.29% interest rate. You finish college in four years, and you begin repayment on December 1 after graduation. What is your total debt then, and how much of that is interest? B) Assume the same situation as in part A, but you also borrow $75000 for each of your third and fourth years (again, the maximum amounts), again on September 1, all at a rate of 4.29% interest rate. You finish college in four years, and you begin repayment on December 1 after graduation, What is your total debt on that…
Manvir invested $1,600 at the beginning of every 6 months in an RRSP for 11 years. For the first 8 years it earned interest at a rate of 4.60% compounded semi-annually and for the next 3 years it earned interest at a rate of 6.30% compounded semi-annually. a. Calculate the accumulated value of her investment at the end of the first 8 years. $48,005.30 $48,332.54 $30,527.46 $31,229.59 b. Calculate the accumulated value of her investment at the end of 11 years. $48,005.30 $48,332.54 $41,945.34 $31,229.59 c. Calculate the amount of interest earned from the investment. $13,132.54 $12,805.30 $12,016.79 $1,115.75
. Investment At the end of t years, the future value ofan investment of $12,000 in an account that pays 8%,compounded monthly, isS = 12,000(1 +0.08/12)12tdollarsAssuming no withdrawals or additional deposits, forwhat time period (in years) will the future value of theinvestment be less than $48,000?