Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: daixieit

MATH 1191 Review for Final Examination Part 2 (Fall 2023)

1. A business loan of $20,000 at 5% compounded quarterly is repaid by a payment of $250 at the end of each month.

a) How many payments are required to settle the loan? 

b) What is the principal portion of the 15^th payment? 

c) What is the interest portion of the 15^th payment?

2. Mr. Lyon bought a house for $650,000. He made a down payment of 15% of the value of the home and received a mortgage for the balance, which is amortized over a period of 15 years. The interest rate was 4.25% compounded semi-annually.

a) What is the size of the monthly payment?

b) What is the outstanding principal balance at the end of the first three-year term?

c) What is the total interest paid during the first three-year term?

d) Calculate the size of the monthly payment if the mortgage is renewed for another three- year term at 3.75% compounded semi-annually.

3. Amanda invested $415 at the beginning of every month in an RRSP (Registered Retirement Savings Plan) for 15 years at 2.8% compounded monthly. 

a) What is the accumulated value of the RRSP after 15 years?

b) What is the amount of interest earned over the 15 years?

4. Sarah would like to receive $1,000.00 at the beginning of every month for ten years. If the withdrawals are deferred to begin three years from now, what amount must she invest today to be able to make the withdrawals if interest is 8% compounded semi-annually?

5. A $25,000 bond paying 6.25% matures on September 27, 2029. An investor desiring a yield rate of 7.75% compounded semi-annually purchases the bond on January 10, 2017.

a)  What is the purchase price of the bond?

b) What is the accrued interest?

c) What was the quoted price of the bond?

6. How much can be paid in scholarships at the end of each year if $150,000 is deposited in a trust fund and interest is 4.5% compounded annually?

7. Transcontinental Pipelines is considering a technical process that is expected to reduce annual maintenance costs by $85,000. What is the maximum amount of money that could be invested in the process to be economically feasible if interest is 7% compounded quarterly?

8. Complete or fill in the entire chart for the annuities in the Table below by filling in all the blanks. Show ALL work below for part marks.