Question

Question 1: To what future value will a principal of $6100.00 amount in three years at 7.6% p.a. compounded: a) annually b) semi-annually c) quarterly d) monthly Question 2: Orange Credit Union expects an average annual growth rate of 16% for the next five years. If the assets of the credit union currently amount to $1.7 million, what will the forecasted assets be in five years? Question 3 A loan for $14320 with interest at 4.75% compounded semi-annually is repaid after 7 years. What is the amount of interest paid? Question 4: An investment of $6300.00 earns interest at 11.96% p.a. compounded monthly for five years. At that time the interest rate is changed to 7% compounded semi-annually. How much will the accumulated value be two and a half years after the change? Question 5: Accumulated $1550.00 at 5.8% p.a. compounded monthly from March 1, 2011, to July 1, 2013, and thereafter at 7.88% p.a. compounded quarterly. What is the amount on April 1, 2015?

PLEASE SOLVE 1 TO 5 QUESTIONS.

Answer 1

Q1.
(a) Compounded annually
p = 3, i = 7.6%
FV = $6100 x (1.076)³ = $7599.18

(b) Compounded semi annually
p = 6, i = 3.8% i.e. 7.6/2
FV = $6100 x (1.038)⁶ = $7629.81

(c) Compounded Quarterly
p = 12, i = 1.9% i.e. 7.6/4
FV = $6100 x (1.019)¹² = $7645.75

(d) Compounded Monthly
p = 36, i = 0.6333% i.e. 7.6/12
FV = $6100 x (1.006333)³⁶ = $7656.61

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