Expert Answers

1. Determine the number of periods and the rate per period for each of the following:

Rate Compounded Years No. of Periods Rate per period

A. 5.8% Annually 8

B. 3% Monthly 4

C. 8% Semiannually 6

D. 8.5% Quarterly 4

E. 5.6% Semiannually 3

2. Compute the following compound amounts and compound interest.

Principal Rate Compounded Years 

A. $1400 6% Monthly 5

B. $2500 5% Quarterly 4

C. $5,200 4% Semiannually 3

D. $9,000 7% Monthly 6

E. $800 8% Quarterly 2

3. Find the total amount of interest and the balance after the quarter ended for the following:

Opening Balance Deposit

A. $1000 on April 2 $200 on April 26

$500 on May 3

$600 on Dec. 3 

B. $1500 on Oct1 $ 900 on Nov 1

$1,000 on Nov. 20

$600 on Dec 3

4. Compute the present value at compound interest, using the data given. Also determine the amount of interest that will be earned before maturity.

Maturity value Rate Compounded Years

A. $1,400 5% Quarterly 5

B. $40,000 8% Semiannually 3

C. $5,200 6% Monthly 6

D. $10,000 7% Quarterly 2

E, $8,700 5% Monthly 4