Compound Interest

1. How long will it take (in years) for $11,450 to accumulate to $29,545.88 if the money is worth 18% compounded semiannually?

2. Find the term of maturity in months for a fund with CV = $7, 000, FV = $10, 866.80, and r = 14.75% compounded monthly.

3. Kevin was told that his loan bears 12% interest. Knowing that the compounding term will be monthly, what is the effective rate of interest?

4. Using the Rule of 72, estimate how long will it take to have an investment with an annual compound interest rate of 13% to grow (a) 2 times (that is, doubling the principal), (b) 3 times, (c) 5 times, and (d) 60 times.

5. What sum of money due at the end of 6 years is equivalent to $2,100 due at the end of 10 years if the compound interest rate is 10.5 %?

6. If $920 is due in 2 years, find an equivalent amount of debt at the end of 10 months, and at the end of 30 months. Consider a compound interest rate of 7.25 %.

7. Charles had a debt of $9,000 which is due in 1 year with 6% interest compounded quarterly. He has already made 2 payments: $1,200 three months after receiving his loan, and $2,570 four months after that payment. How much would he still have to pay to settle all debt at the original maturity?

8.$2,500 is left in an account that pays 7.5% interest rate for 4 years. Calculate how much it would grow to (a) if the rate of interest is simple and (b) if the rate is compound. (c) What is the difference between the two future values?

9. Calculate the future value of a savings account of $10,000 for 6 years at 9 % compound interest.

10. How long will it take an investment fund of $4,000 to be (a) $8,000, (b) $12,000, and (c) $20,000 if the interest rate is 10% compound annually?