• Peter paid off his student loan in 5 years by making payments of $400 at the beginning of every month. The interest rate on his loan was 5.20% compounded monthly.

a.Calculate the size of the original loan. Round to the nearest cent

b.Calculate the amount of interest paid on the loan. Round to the nearest cent

• Caleb secured a lease on a machine by paying $1,950 as a down payment and then $225 at the beginning of every half-year for 3 years. Assume that the cost of financing is 3.47% compounded semi-annually.

a.What was the principal amount of the loan? Round to the nearest cent

b.What was the cost of the machine? Round to the nearest cent

c.What was the amount of interest paid over the term? Round to the nearest cent

• Since the birth of his daughter, 16 years ago, Amy has deposited $150 at the beginning of every month into a Registered Education Savings Plan (RESP). The interest rate on the plan was 5.00% compounded monthly for the first 7 years and 3.90% compounded monthly for the next 9 years.

a.What would be the accumulated value of the RESP at the end of 7 years? Round to the nearest cent

b.What would be the accumulated value of the RESP at the end of 16 years? Round to the nearest cent

c.What is the amount of interest earned during the 16 year period? Round to the nearest cent

• Steven deposited $28,500 into a fund at the beginning of every quarter for 12 years. He then stopped making deposits into the fund and allowed the investment to grow for 3 more years. The fund was growing at 6.74% compounded monthly.

a.What was the accumulated value of the fund at the end of year 12? Round to the nearest cent

b.What was the accumulated value of the fund at the end of year 15? Round to the nearest cent

c.What is the total amount of interest earned over the 15-year period? Round to the nearest cent

• A contract requires lease payments of $600 at the beginning of every month for 8 years.

a.What is the present value of the contract if the lease rate is 4.77% compounded annually? Round to the nearest cent

b.What is the present value of the contract if the lease rate is 4.77% compounded daily? Round to the nearest cent

• Jeremy set up a savings fund for his son's education so that he would be able to withdraw $1,600 at the beginning of every month for the next 4 years. The fund earns 3.54% compounded quarterly.

a.What amount should he deposit today to allow for the $1,600 periodic withdrawals? Round to the nearest cent

b.How much interest would he earn in this investment? Round to the nearest cent

• Rebecca contributed equal deposits at the end of every month for 4 years into an investment fund. He then decided to stop making payments and left the money in the fund to grow for another 3 years. The fund was earning 4.47% compounded monthly for the entire period and the accumulated amount at the end of the term was $70,000.

a.Calculate the amount in the fund at the end of 4 years. Round to the nearest cent

b.Calculate the size of the periodic deposits into the fund.Round to the nearest cent