1. Pedro made an investment at the beginning of January, 2000. It has grown to be $68359.1 by the beginning of April, 2006. At a rate of interest of 4.24% per year compounded monthly, what was the initial investment?

2. What amount invested today at the rate of 3.16% compounded monthly will produce $4203.87 in 6 years? Give your answer rounded to 2 decimal places.

3. You are looking to save up enough money to buy Kelowna Rockets premium club seats, which retail for $1155.40. You want to invest sufficient money today in order to pay for the tickets in 6 months. Assuming your investment has a rate of return of 6% compounded quarterly, what amount should you invest?

4. Suppose an investment of $19096.37 is held for 29 quarters at a rate of 6.7% compounded quarterly, what will be the value of the investment at maturity?

5. A deposit of $4092 is made to an account bearing a nominal interest rate of 3.62%. How much more will be in the account after 10 years if interest is compounded monthly rather than quarterly? Give your answer rounded to 2 decimal places.

6. At what quarterly compounded, nominal rate of interest will it take 7 years for an investment of $4616.34 to grow to $4880.91? Give your answer as a percentage rounded to 2 decimal places.

7. Suppose that after 8 years, an investment exactly doubles its value. If interest is compounded semiannually, what is the nominal rate of interest? Express the rate as a percentage, not as a decimal.

8. An investment grows from $12914.28 to $22407.94 at a rate of interest of 2.38% per year compounded biweekly. How many years was the investment held?

9. An investment grows from $25300.07 to $39362.87 at a rate of interest of 4.08% per year compounded semiannually. How many years was the investment held?

10. For how many years must an investment of $2949.6 earn interest at the rate of 5.7% compounded monthly to produce a value of $4887.54? Give your answer rounded to 2 decimal places.

11. Using the rule of 72, how long (roughly) would it take in years for a $4800 investment to mature at $19200, assuming a nominal rate of 8% compounded semiannually?

12. What payment made today is equivalent in value to a payment of $1046 made 5 years ago and a payment of $11706 due in 10 years? Suppose that interest is 4.8% compounded semi-annually and give your answer rounded to the nearest cent.

13. A contract requires that Bob makes payments of $2227 and $3969 to Jim 27 and 39 months respectively. Bob would like to change the payment structure to a payment of $1951 today, and a second payment made 39 months from today. If the two sets of payments are economically equivalent, and the interest rate is 4.6% compounded quarterly, then what is the amount of the second payment? Give your answer rounded to the nearest cent.

14. A friend of yours hasn't taken this course and therefore does not appreciate the time-value of money. He offers to pay you back for that time he borrowed money and gives you two options:

Two equal payments of $1110, today and in 2 years, or

One single payment of $2220 (twice the amount) in 1 year..

Now, because you appreciate the time-value of money, you realize that, while the two options appear to have equal value, the two-payment option has a greater value. Assuming money can earn 10% compounded quarterly, how much of a difference is there between the values of the two options? Use today as your focal date and ensure your answer is positive.

15. If an investment pays 6.79% per year compounded quarterly, what is the effective interest rate?

16. What is the effective rate of an investment where interest is 7.3% compounded continuously? Express as a percentage.

17. Suppose an investment pays a rate of 3.43% compounded quarterly, what is the equivalent monthly compounded rate?

18. The bank offers you a 4% continuously compouding interest rate. If the bank offers you an equivalent interest rate compounded quarterly, what will that interest rate be (use 3 significant figures and express as a percent)?

19. Find the monthly-compounded nominal interest rate that is equivalent to an effective rate of 21%.

Select one:

a. 1.75%

b. 19.214% Correct

c. 1.601%

d. 1.929%

e. 23.144%

20. What is the semi-annually-compounded nominal rate that is equivalent to 10.5% compounded monthly?

Select one:

a. 8.75%

b. 11.44%

c. 10.73% Correct

d. 11.02%

e. 5.37%