1. What amount was invested 35 years ago at 7% compounded semiannually if the value of the investment has now grown to $1,000,000? Round to the nearest dollar. 2. Murphy's annual income has increased by 10% per year for the last 8 years. If Murphy's annual income is now $72,596, what was it 8 years ago? Round to the nearest dollar. 3. Money is worth 5% compounded semiannually. What is the value today of a contract that will bring in a payment of $86,500 in nine years? Round to the nearest dollar. 4. Eighteen years from now I will need to have $120,000 to pay for my child's post-secondary education. I anticipate being able to earn 14% compounded annually for the first 10 years and 11% compounded annually for years #11 through # 20. To the nearest dollar, what amount of money should I invest today in order to meet my goal? 5. Doris is retiring today and she plans to buy a new car for $25,000 seven years from now and a second new car for $40,000 seventeen years from now. How much "new car money" should she set aside now if she can expect to earn 8% compounded annually on her savings? Round to the nearest dollar. 6. Today is Almo's 20th birthday and he has just received a large amount of money to sign a contract with a professional hockey team. He wants to put away enough money to make sure that on his 50th birthday he will have $2,500,000. For the next ten years he is confident that his investments will earn 15% compounded annually and after that, 10% compounded annually. To the nearest dollar, how much must he invest today? 7. Andy borrowed money four years ago at 13.2% compounded monthly. He now owes a total of $13,743. To the nearest dollar, how much of this is interest? 8. In order to pay off a debt that he took out today, Roger will have to make a payment of $3,500 in 15 months and $5,500 in 36 months. The interest rate is 8% compounded quarterly. What is the total amount of interest that is included in these payments? 9. Two payments of $7,500 each must be made three years and six years from now. If money can earn 8.4% compounded monthly, what single payment, four years from now, would be equivalent to the two scheduled payments? Round to the nearest dollar. 10. Two payments of $850 and $600 must be made two years and five years from now respectively. If money can earn 4% compounded semiannually, what single payment, three years from now, would be equivalent to the two scheduled payments? 11. Kramer borrowed $6,000 from George at an interest rate of COC Kramer borrowed $6,000 from George at an interest rate of 6% compounded quarterly. The loan is to be repaid by three payments. A payment of $2,000 is due two years after the date of the loan. The second and third payments are to be of equal amounts and are to be paid three and five years after the date of the original loan. Calculate the size of the last two payments.

12. A loan of $10,000 is being taken out today. The interest rate is 9% compounded monthly. Equal payments are to be made two and five years from now. After the second payment is made in five years there will be a balance of $3,000 still owing on the loan. Calculate the size of the two equal payments.

13. What periodic payment will an investor receive from a six-year, $90,000 monthly payment GIC earning a nominal rate of 4.2% compounded monthly?

14. What periodic payment will an investor receive from a 10-year, $250,000 annual payment GIC earning a nominal rate of 5.88% compounded annually?

15. What regular interest payment will Grandmamma receive from a seven-year, $1,750,000 monthly payment GIC earning a nominal rate of 5.4% compounded monthly?

16. Calculate the maturity value of a five-year, $400,000 Guaranteed Investment Certificate accumulating interest at 6% compounded quarterly. Round to the nearest dollar.

17. Calculate the maturity value of a two-year, $20,000 Guaranteed Investment Certificate accumulating interest at 5% compounded semiannually. Round to the nearest dollar. 18. First Dominion Bank offers a two-year "Rising Rate" GIC. For the first year the interest rate is 4.5% compounded semiannually and for the second year the rate is 5.5% compounded semiannually. To the nearest dollar, what will be the maturity value of a $50,000 two-year "Rising Rate" GIC?

19. A bank offers a four-year "Escalating Rate GIC" on which the interest rate for year one is 3% compounded annually, 4% compounded annually for year two, 5% compounded annually for the third year and 6% compounded annually for the fourth year. To the nearest dollar, determine the maturity value of a $100,000 four-year "Escalating Rate GIC".

20. To the nearest dollar, how much interest would be earned on a 10-year $117,000 Guaranteed Investment Certificate that grows at 9% compounded monthly?

21. Marvin has a five-year GIC which has a maturity value of $88,206.38. The GIC is accumulating interest at 6.2% compounded semiannually. What is the principal amount of the GIC?

22. Oswald has a five-year compound interest GIC. Its interest rate is 7.2% compounded monthly and its maturity value will be $76,243. To the nearest dollar, how much interest will he have earned over the five-year term?

23. A 25-year, $10,000 strip bond was issued at a market rate of 9.4% compounded semiannually. What was the issue price?

24. A 30-year, $1,000 strip bond was issued by Sun Oil Company at a yield rate of 8.8% compounded semiannually. How much money did Sun Oil borrow by issuing this bond?

25. Four years after it was first issued at 6% compounded semiannually, a 25-year, $10,000 strip bond was sold on the bond market at a price that would provide the purchaser with a yield rate of 4.8% compounded semiannually. To the nearest dollar, what was the selling price at that time?

26. A 30-year, Government of Canada $10,000 strip bond was discounted at 4.9% compounded semiannually and traded for $4,722. How many years earlier had the bond been issued?

27. At 14% compounded annually, an investment of $50,000 will grow to $1,000,000 in 22.86 years. How much longer will it take at 11% compounded annually?

28. At 11.4% compounded quarterly, how long will it take for money to double?

29. Pat and Jamie are twins. They will both invest $2,500 on their 20th birthday. Pat's money will accumulate at 14% compounded annually for 35 years until their 55th birthday. Being less of a risk taker Jamie will select an investment that will provide a return of only 8.5% compounded annually. If when they reach age 55, Jamie decides to leave the money growing at 8.5% how many more years will it take for Jamie's investment to reach the value that Pat's will be at age 55?

30. Sollozo just made a single payment to repay a loan he had with the Corleone Finance Company. He paid a total of $86,500 which included interest of $56,500 at 48% compounded monthly. How long ago was the money borrowed?

31. If the population of Green City is growing at a rate of 5% per year, how long will it take to grow from 2,300 to 10,000?

32. If the population of Dodge City is decreasing at a rate of 19% per year, how long will it take to decrease from 7,700 to 2,000?

33. An investment of $7,500 at 8% compounded monthly is now worth $13,280. How long ago was the investment made? 34. Calculate the effective annual rate for 14.4% compounded monthly.

35. Calculate the effective annual rate for 9.4% compounded quarterly. 36. Calculate the effective annual rate for 19.2% compounded semiannually.

37. Calculate the effective annual rate for 18% compounded annually.

38. Many department stores charge 2.4% per month on overdue accounts. What is the effective annual rate in this situation?

39. What monthly compounded nominal rate has an effective rate of 14.29%?

40. Calculate the effective annual rate if $100 grew to $165 in 11.5 years with quarterly compounding.

41. On overdue accounts the telephone company charges 1.25% per month. What is the effective annual rate?

42. Over six years Craig earned interest of $8,400 on an investment of $20,000. What effective rate of return did he earn?

43. Over nine years Craig earned interest of $29,700 on an investment of $16,000. What effective rate of return did he earn? %

44. Bobby invested $1,000 for five years. For the first two years he earned 9% compounded monthly. For the next two years he earned 11% compounded quarterly. For the final year he earned 14% compounded semiannually. What was his effective rate of return over the five years?

45. Carlita invested $10,000 for 25 years. For the first 15 years she earned 15% compounded semiannually. For the last 10 years she earned 9.6% compounded monthly. What was her effective rate of return over the 25 years?

46. Lansky Finance Company was charging 1.87% per month on overdue accounts but negative publicity and public pressure made them decide to reduce the rate. What monthly finance charge would result in an annual effective rate of 19.99%?

47. What is the monthly compounded nominal rate that is equivalent to 7.8% compounded semiannually?

48. What is the monthly compounded nominal rate that is equivalent to 19.56% compounded annually?

49. Seventeen years after it was first issued at 11% compounded semiannually, a 30-year, $1,000 strip bond was sold on the bond market at a price that would provide the purchaser with a yield rate of 6.4% compounded semiannually. What was the selling price at that time?

50. A 25-year, $10,000 strip bond was first issued at 6% compounded semiannually. Nine years before maturity it was sold on the bond market at a price that would provide the purchaser with a yield rate of 6.8% compounded semiannually. To the nearest dollar, what was the selling price at that tim

1. What amount was invested 35 years ago at 7% compounded semiannually if the value of the investment has now grown to $1,000,000 ? Round to the nearest dollar. 2. Murphy's annual income has increased by 10% per year for the last 8 years. If Murphy's annual income is now $72,596, what was it 8 years ago? Round to the nearest dollar. 3. Money is worth 5% compounded semiannually. What is the value today of a contract that will bring in a payment of $86,500 in nine years? Round to the nearest dollar. 4. Eighteen years from now I will need to have $120,000 to pay for my child's post-secondary education. I anticipate being able to earn 14% compounded annually for the first 10 years and 11% compounded annually for years \#11 through #20. To the nearest dollar, what amount of money should I invest today in order to meet my goal? 5. Doris is retiring today and she plans to buy a new car for $25,000 seven years from now and a second new car for $40,000 seventeen years from now. How much "new car money" should she set aside now if she can expect to earn 821% compounded annually on her savings? Round to the nearest dollar. 6. Today is Almo's 20th birthday and he has just received a large amount of money to sign a contract with a professional hockey team. He wants to put away enough money to make sure that on his 50th birthday he will have $2,500,000. For the next ten years he is confident that his investments will earn 15% compounded annually and after that, 10% compounded annually. To the nearest dollar, how much must he invest today? 7. Andy borrowed money four years ago at 13.2% compounded monthly. He now owes a total of $13,743. To the nearest dollar, how much of this is interest? 8. In order to pay off a debt that he took out today, Roger will have to make a payment of $3,500 in 15 months and $5,500 in 36 months. The interest rate is 8% compounded quarterly. What is the total amount of interest that is included in these payments? 9. Two payments of $7,500 each must be made three years and six years from now. If money can earn 8.4% compounded monthly, what single payment, four years from now, would be equivalent to the two scheduled payments? Round to the nearest dollar