ence is not large, however, it is important to know the rules that ap particular transaction Exercise 4.1 Part A 1. George deposits $200 at the bespinning of each year in a bank account that carns interest at 4-6%. How much money will be in his bank account at the end of 5 years? 2. A car is purchased by paying $2000 down and then 300 cach quarter-year for 3 years. If the interest on the loan was js = 9:2%, what did the car sell for 3. An insurance policy requires premium payments of $15 at the beginning of each month for 20 years. Determine the discounted value of these payments atj-5% 4. Payments of S10 are to be made at the end of each half-year for the next ten years. Determine their discounted value if the interest rate is 12% per annum compounded a) half-yearly, b) quarterly. c) annually d) continuously 5. Deposits of S100 are made at the end of each quarter to a bank account for 5 years. Determine the accumulated value of these payments if a) -6%; b)-6%:0) - 6%d)). -6%. 6. Determine the monthly payment on a $3000 loan for 4 years at a) 4-9%;b)).-9%. 7. Determine the discounted value at ja = 10% of 20 annual payments of $200 each, the first one due five years hence 8. Julia borrows $10 000. The loan is to be repaid with equal payments at the end of each month for the next 5 years. Determine the size of these payments if a) 4-12% b) j = 12% 9. Upon graduation, Scott determines that he has borrowed 58000 from the provincial loan plan over his three years of university. This loan must be repaid with monthly payments (first payment at the end of the first month) over the next 5 years. If = 8%, determine the monthly payment 10. How much must be deposited in a la at the end of each quarter for years accumulate S4000 if a ja 6% 6 11. Upon her husbands death, a widow her husband had a S30000 life insur One option wailable to her is amon annuity over a 10-year period. If the company pays 6% per annum, what income (at the end of each month) provide? 12. A city wants to scalate $500 000 next 20 years to redeem an issue of What payment will be required at the cach 6 months occumulate this am interest is earned a compounded 13. Deposits of $200 are made at the end month for years into an account wh is paid at-9%. Determine the acc value of the account at the end of 5 3) simple interest is paid for part of b) compound interest is paid for part period 14. Determine the accumulated value of deposits made at the end of each mo 3 years at f=5% if a) compound in b) simple interest is paid for part of a period 15. Which is cheaper? a) Buy a car for $14000 and after the trade it in for SAXO b) Rent a car for $350 a month payal end of each month for three years maintenance and license costs are and) -79% 16. An insurance company pass 5% per money left with them. What would be of an annuity certain paring $250 at th each month for 10 yeni 07351 d
