Reference no: EM133112760

Question 1 - Molly saved $210 at the end of every month for 3 years in her bank account that earned 6.80% compounded monthly.

a. What is the accumulated value of her savings at the end of 3 years?

b. What is the interest earned over the 3 year period?

Question 2 - Calculate the amount of money Tara had to deposit in an investment fund growing at an interest rate of 2.50% compounded annually, to provide her daughter with $11,000 at the end of every year, for 3 years, throughout undergraduate studies.

Question 3 - Bryan planned to buy a house but could afford to pay only $7,000 at the end of every 6 months for a mortgage with an interest rate of 3.60% compounded semi-annually for 25 years. He paid $25,250 as a down payment.

a. What was the maximum amount he could afford to pay for a house?

b. What was his total investment through the mortgage period (not taking the time-value of money into account)?

c. What was the total amount of interest paid through the mortgage period?

Question 4 - Shane invested $100 at the end of every month into an RRSP for 5 years. If the RRSP was growing at 4.80% compounded quarterly, how much did he have in the RRSP at the end of the 5-year period?

Question 5 - A payment of $3,500 was made into an account at the end of every 3 months for 12 years.

a. If the interest rate for the first 5 years was 3.00% compounded monthly, calculate the future value at the end of the first 5 years.

b. If the interest rate for the next 7 years was 4.00% compounded annually, calculate the future value at the end of the 12 year term.

Required 6 - While buying a new car, Kayla made a down payment of $700 and agreed to make month-end payments of $250 for the next 3 years and 7 months. She was charged an interest rate of 2% compounded semi-annually for the entire term.

a. What was the purchase price of the car?

b. What was the total amount of interest paid over the term?