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 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. 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. Tags finance, interest, plese, questions Thread Tools Show Printable Version Email this Page Display Modes Linear Mode Switch to Hybrid Mode Switch to Threaded Mode Similar Threads Thread Thread Starter Forum Replies Last Post Hithere Algebra 1 November 22nd, 2013 07:23 PM mami Complex Analysis 1 February 13th, 2012 02:32 PM tallo Calculus 0 November 3rd, 2011 12:27 PM r-soy Physics 2 January 3rd, 2011 11:29 AM r-soy Physics 1 December 26th, 2010 11:13 AM

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