1. Pedro made an investment at the beginning of January, 2000. It has grown to be $66682.25 by the beginning of April, 2006. At a rate of interest of 6.65% per year compounded monthly, what was the initial investment?

2.A deposit of $2003 is made to an account bearing a nominal interest rate of 3%. How much more will be in the account after 2 years if interest is compounded monthly rather than quarterly? Give your answer rounded to 2 decimal places.

3.For how many years must an investment of $2566.5 earn interest at the rate of 4.5% compounded monthly to produce a value of $4071.62? Give your answer rounded to 2 decimal places.

4.An investment grows from $25273.86 to $37581.86 at a rate of interest of 3.59% per year compounded semiannually. How many years was the investment held?

5.The brick has a no payment and no interest policy for 1.5 years on all purchases over $1000. Recently, I purchased a sofa, love seat, dining room set and bedroom set for a total purchase of $5096.98. I noted at the time that the rate or interest was 8.11% per year compounded semi-annually. What amount should I have offered to pay them today for my purchase?

6.At what quarterly compounded, nominal rate of interest will it take 5 years for an investment of $3379.46 to grow to $3668.66? Give your answer as a percentage rounded to 2 decimal places.

7.What is the value of the following payment stream 1 year from now, at a simple interest rate of 7.9%.

• $10,000 3-years ago,
• $6,000 1.25 years ago,
• $12,000 due in 3 years,
• $18,000 due in 5 years.
• What is the value of the payment stream at the focal date?

8. 4 months ago, Kevin borrowed a total of $1300 from Angela. They agreed to split the loan into amounts of $520 and $780, to be paid 7 and 11 months from the date of the agreement, respectively. On both of these payments, Kevin agreed to pay interest on each of the principle amounts at the rate of 12%.

Kevin now wishes to repay the loan in one single payment, 4 months from now. If money can now earn 9% rate of return, what single payment should Kevin require?

Timeline Hint:

4 months ago Today 3 months from now 4 months from now 7 months from now

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9.What amount is equivalent today to a sum of $3997.21 paid 18 months ago, and a payment of $4812.42 due in 2.6 years? Assume the rate of simple interest is 3.3%

10.Ricardo takes out a loan from Enrique. It is agreed that Ricardo will pay back the loan in two payments, $3836 after 2 years and $3990 after 6 years. Ricardo decides he wants to renegotiate the payment schedule so that he has two equal payment at 2 and 5 years. What should Ricardo's equal payments be? (Assume Enrique can earn 6% interest compounded weekly)