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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 semiannually. 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 Ã— 11% Ã— 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% Ã— 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 Ã— 365 days = 56 days approximately, and 56 days after January 15 is March 12. 

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