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    Math

    Uploaded by

    Mila Movida
    This document contains 5 word problems involving compound interest calculations. Each problem provides the interest rate, time period, and asks the reader to calculate the maturity value. The solutions show setting up and solving the compound interest formula to find the future value in each case.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Math

    Uploaded by

    Mila Movida
    5K views1 page
    This document contains 5 word problems involving compound interest calculations. Each problem provides the interest rate, time period, and asks the reader to calculate the maturity value. The solutions show setting up and solving the compound interest formula to find the future value in each case.

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    math

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    This document contains 5 word problems involving compound interest calculations. Each problem provides the interest rate, time period, and asks the reader to calculate the maturity value. The solutions show setting up and solving the compound interest formula to find the future value in each case.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    5K views1 page

    Math

    Uploaded by

    Mila Movida
    This document contains 5 word problems involving compound interest calculations. Each problem provides the interest rate, time period, and asks the reader to calculate the maturity value. The solutions show setting up and solving the compound interest formula to find the future value in each case.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    1.

    What will be the maturity value of 12 000 invested for four years at 15% compounded
    quarterly?
    Answer:
    0.15/4 = 0.0375 4x4=16
    16
    F = P (1 + i )
    = 12 000 (1 + 0.0375)16
    = 12 000 (1.0375)16
    = 12 000 (1.803)
    = 21 636

    2. Determine the maturity value of 3000 invested at 9.5% compounded semi-annually for 3 and ½
    years?
    Answer:
    9.5/2 = 4.75 2x3.5=7
    7
    = 3 000 (1+4.75)
    = 3 000 (5.75)7
    = 3 000 (207814)

    3. What amount must be invested now in savings account earnings 9% compounded quarterly to
    accumulate a total of 21 000 after 4 and ¾ years.
    Answer:
    0.09/4= 0.0225 4x4.75=19
    = 21 000 (1.0225)-19
    = 21 000 (0.6553)
    = 13 761.3

    4. Millet wants to provide a 200 000 graduation gift for her daughter Mae who is now 16 years old.
    She would like the fund to be available by the time her daughter is 20. She decides on an
    investment that pays 10% compounded quarterly. How large must the deposit be?
    Answer:
    0.10/4= 0.025 4x4=16
    = 200 000 (1.025)-16
    = 200 000 (0.6737)
    = 134 740

    5. Ms. Cruz can buy a piece of property for 6 500 000 cash or 4 000 000 down payment and 4 200
    000 in five years. If she has money earning 8% converted quarterly, which is a better purchased
    plan and by how much?
    Answer:

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