Exercises

1. By calculating the maturity value of $100 invested for one year at each rate, determine which rate of return an investor would prefer.

a.3.0% compounded monthly b. 3.1% compounded quarterly

c.3.2% compounded semiannually d.3.3% compounded annually

2. What total interest will be earned by $5000 invested at 5.4% compounded monthly for 3.5 years?

3. How much interest was paid on a $1500 loan for seven months at an annual interest rate of 4.5%? What is the total amount due at the end of maturity period of the loan?

4. Evaluate the following to the nearest cent: