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1) (2 marks) $23,000 is invested into a new account that earns ordinary interest (bankers rule) at a simple interest rate, r. At the end
1) (2 marks) $23,000 is invested into a new account that earns ordinary interest (bankers rule) at a simple interest rate, r. At the end of 149 days the amount of interest earned on this account is $320.00. If instead this account earned exact interest at the same simple interest rate r, what would be the accumulated value of the account at the end of 149 days? 2) (3 marks) Ahmed borrows $30,000 and writes a promissory note on July 10, 2021. You are given the following; The due date is December 12, 2021. The value on the maturity date (or maturity value) $31,416.00. . Prior to the maturity date, the note is sold to a bank that discounts the note at r= 5%. The bank pays $31,151.44. On what calendar date was the note sold to the bank? 3) (5 marks) A loan of $26,000 was taken out today. It is to be repaid with 3 payments as follows: $10,000 at the end of 4 months, $Y at the end of 10 months, and (5,000 + Y) at the end of 14 months. What is the value of Y if r=4%? Use 10 months as your focal date. When answering this question, be sure to fully demonstrate your understanding of the equation of Value (EOV) process (see steps discussed in lectures)
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