My Math Forum  

Go Back   My Math Forum > Science Forums > Economics

Economics Economics Forum - Financial Mathematics, Econometrics, Operations Research, Mathematical Finance, Computational Finance


Reply
 
LinkBack Thread Tools Display Modes
February 21st, 2015, 01:14 PM   #1
Newbie
 
Joined: Feb 2015
From: Canada

Posts: 1
Thanks: 0

Please help with some questions

Can someone please help me solve these questions below? If you could show the steps so I can dissect how you got it, it would help me A LOT.

1.a) Determine the maturity date and maturity value of a 5 month promissory note issued on March 10, if the rate specified on the note was 11% simple and the face value was \$30 000.

b) Determine the proceeds and the amount of discount if this note was discounted at 12% simple on May 2.

2. Determine the simple interest rate charged if a loan of \$5500 is repaid with an amount of \$5871.25 after 180 days.

4. An investment of \$11 000 is worth \$34 181.15 after 10 years. What rate compounded quarterly was earned by the investment?

6. Determine the nominal annual rate of interest compounded monthly that is equivalent to 9% compounded semi-annually.

7. Determine the maturity date if an investment of \$10 000 on January 15 at a rate of 8.4% simple earns interest of \$128.88 over the term of the investment.

8. A business has obligations of \$5000 and \$8000 due in five months and ten months respectively.

These two obligations are to be replaced with payments of \$7000 in one year and a final payment in 18 months.

Assuming a rate of 9.6% compounded monthly, what should the size of the final payment be? (Time diagram required.)

Last edited by skipjack; February 21st, 2015 at 02:12 PM.
Wildtimes905 is offline  
 
February 21st, 2015, 03:09 PM   #2
Global Moderator
 
Joined: Dec 2006

Posts: 20,613
Thanks: 2071

I am not particularly expert at how dates are calculated for financial purposes, but here are some answers.

1.a) Assuming 11% was an annual rate, the interest over 5 months is \$30000 × 11% × 5/12 i.e., \$1375, so the maturity value is \$31375, payable on August 10.

2. \$5871.25 / \$5500 = 1.0675, so the interest rate over 180 days was 6.75%. The corresponding annual rate would be double that (if a year is taken to be 360 days rather than 365). (Or multiply by 365/180 if you think that's appropriate.)

4. (\$34181.15 / \$11000)^(1/40) = 1.02875 approximately. So the interest rate per quarter was 2.875%, which is equivalent to an annual rate of 11.5%.

6. 1.045^(1/6) = 1.007363123025 approximately, and 0.7363123025% × 12 = 8.83574763%. It would be reasonable to round this to fewer significant figures, but I'm not sure how many.

7. 8.4% of \$10000 is \$840. \$840 / \$128.88 × 365 days = 56 days approximately, and 56 days after January 15 is March 12.
skipjack is offline  
Reply

  My Math Forum > Science Forums > Economics

Tags
finance, interest, plese, questions



Thread Tools
Display Modes


Similar Threads
Thread Thread Starter Forum Replies Last Post
Help with various questions please & thank you Hithere Algebra 1 November 22nd, 2013 07:23 PM
help for two questions please mami Complex Analysis 1 February 13th, 2012 02:32 PM
help with these questions tallo Calculus 0 November 3rd, 2011 12:27 PM
questions need s r-soy Physics 2 January 3rd, 2011 11:29 AM
Help me [with these] questions r-soy Physics 1 December 26th, 2010 11:13 AM





Copyright © 2019 My Math Forum. All rights reserved.