1

A payment of $7,500 was made into an account at the end of every 3 months for 12 years.

a. If the interest rate for the first 7 years was 6.00% compounded monthly, calculate the future value at the end of the first 7 years.

Round to the nearest cent

b. If the interest rate for the next 5 years was 4.00% compounded annually, calculate the future value at the end of the 12 year term.

Round to the nearest cent

2

While buying a new car, Raymond made a down payment of $1,100 and agreed to make month-end payments of $320 for the next 5 years and 8 months. She was charged an interest rate of 2% compounded semi-annually for the entire term.

a. What was the purchase price of the car?

Round to the nearest cent

b. What was the total amount of interest paid over the term?

Round to the nearest cent

3

Laurence contributed $4,230 at the end of every 6 months to an RRSP fund earning 8.55% compounded semi-annually for 13 years.

a. What was the future value of the fund at the end of the term?

Round to the nearest cent

b. What was the amount of interest earned over this period?

Round to the nearest cent