1. Betty just signed a contract for her business that will allow her to make interest-only payments for the next 12 months. If her interest rate is 12% compounded monthly and her outstanding principal is $5,000, how much will she pay in interest every month?
2. After a period of three months, Alese saw one interest deposit of $176.40 for a principal of $9,800. What nominal rate of interest is she earning?
3. What is the maturity value of your $7,800 investment after three years if the interest rate was 5% compounded semi annually for the first two years, 6% compounded quarterly for the last year, and 2 years after the initial investment you made a deposit of $1,200? How much interest is earned?
4. A debt of $37,000 is owed 21 months from today. If prevailing interest rates are 6.55% compounded quarterly, what amount should the creditor be willing to accept today?
5. Darwin is a young entrepreneur trying to keep his business afloat. He has missed two payments to a creditor. The first was for $3,485 seven months ago and the second was for $5,320 last month. Darwin has had discussions with his creditor, who is willing to accept $4,000 one month from now and a second payment in full six months from now. If the agreed upon interest rate is 7.35% compounded monthly, what is the amount of the second payment?
6. In a civil lawsuit, a plaintiff was awarded damages of $15,000 plus $4,621.61 in interest for a period of 3 years. What quarterly compounded rate of interest was used in the settlement?
7. At what monthly compounded interest rate does it take five years for an investment to double?
8. Your company's union just negotiated a salary increase of 0.5% every three months. What effective increase in your salary was negotiated?
9. GenX Holdings received an invoice from its supplier that indicates the penalty on overdue invoices will be charged at a rate of 3.4% per month. What effective rate of interest is being charged on overdue invoices?
10. How long will it take $5,750 to become $10,000 at 6.25% compounded weekly?