Process

• {A}% = the last three digits of your student number, divided by 100 (ex. if your number is A00xxx372, use 3.72)
• {B} = monthly
• ${C} = your student number (last six digits, i.e. without A00)
• ${D} = your student number + 18,555
• ${E} = your student number + 11,111
• {F} months = the first two significant digits of your student number (ex. if your number is A00276xxx, use 27)
• {G} = quarterly
• {H}% = the value from {A} + 1.5
• {I} = semi-annually

List these values CLEARLY at the very top of your submission.

• • If you are completing your work electronically, type the list of variables ({A} {I}) and type the number values beside each letter)
  • If you are completing your work on paper, writethe list of variables ({A}{I}) and write the number values beside each letter)

THIS LIST OF VARIABLES MUST BE STATED BEFORE YOU COMPLETE ANY CALCULATIONS!

Step 3: Solve Problems

Read the 'Mini-Case' below which presents a real-world scenario for the application of financial mathematics concepts. FIND the calculations indicated in each subsequent part. For each calculation/part, be sure to show your work (the values used to obtain your answer along with any relevant timelines) and a final statement. Be sure your work is clear and professional throughout!

Mini-Case

Jagmeet is hoping to start a non-profit organization to help families with critically-ill children pay for the travel and accommodation costs associated with seeking medical care outside of the Greater Sudbury Area. As a graduate of of the General Business program at Cambrian College, he applied for and received a large grant. During the planning phase of his venture, he invested all of this grant money at {A} compounded {B}.

After two years of compound interest, the invested grant money accumulated to{C}. Conveniently, this was the exact amount needed to fund his non-profit, and to begin helping the community.

PART A

What was the original grant amount invested?

PART B

What rate, compounded annually, would have resulted in the same accumulated value{C}?

PART C

Using your answer from PART A, how long (in months) would it have taken for Jagmeet's grant to accumulate to {D} if he did not use/withdraw any of the funds? Assume the same interest rate of {A} compounded {B} throughout this period.

PART D

If Jagmeet had invested the grant money (calculated in PART A) in a different local bank, it would have accumulated to {E} in {F} months instead of in 2 years (24 months). What is the interest rate compounded {G} charged by the different local bank?

PART E

Using your answer from PART A, and assuming no withdrawals or deposits occur, how much would Jagmeet have after two years if the investment earned{A} compounded {B} for the first year, and {H} compounded {I} for the second year?

STUDENT ID to be used is A00241596