1. Compute the future value (compound amount) of $4,500 invested for 10 years at 5% compounded quarterly. 2. Calculate the future value (compound amount) on a loan of $38,260 at 8% compounded annually for 13 years. 3. How much compound interest will you earn if you invest $7,900 for 16.5 years at 12% compounded semiannually? 4. Karen Wilson thinks that she needs to borrow $7,600 for 2 years. She doesn't have a very good credit rating, so most finance companies want to charge her a high interest rate. She finally finds a lender that will loan her the money at 12% compounded monthly. How much interest will Karen have to pay to this particular lender? 5. William Wang wants to borrow money from his father to buy a car. William's father is trying to teach him how to manage money, so he agrees to loan him the money, but at 5% compounded quarterly. William borrows $11,200 and repays everythingprincipal plus all of the interestin years. How much does William pay back to his father? 6. Don Hildebrand is trying to decide whether to invest money in a bank or in something a little riskier that will pay a higher return. One very simple investment promises to pay a minimum of 8% compounded annually, but he must leave all of the money and interest invested for 9 years. How much interest will Don earn during the 9 years if he invests $7,150 and the investment pays the minimum? 7. How much compound interest would you pay if you repay a total of $8,425 one and a half years after borrowing the principal at 9% compounded monthly? 8. Calculate the present value (principal) of a loan made 4 years ago at 12% compounded quarterly if the borrower repays a total of 89,600. 9. Compute the amount that a company must invest (the present value) at 10% compounded annually if it wants to have $100,000 available (the future value) in 25 years. 10. How much compound interest is earned on a 6.5-year investment that has a rate of return of 6% compounded quarterly and repays a total compound amount (future value) of $9,600? 11. Mrs. Lorez wants all of her grandchildren to go to college and decides to help financially. How much must she give to each child at birth if they are to have $10,000 on entering college 18 years later, assuming 6% interest compounded annually? 12. Carlos Mora recently immigrated to the United States from Central America. His family has agreed to help him set aside the cash needed to open a small bakery in 2 years once he completes a program at a culinary institute. Find the amount they must deposit today in an investment account expected to yield 4% compounded quarterly if he needs $95,000 to open the shop in 2 years
