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Problem 10

Determine the simple interest rate at which $$\$ 1200$$ will grow to $$\$ 1250$$ in 8 mo.

Expert verified

The simple interest rate at which $$\$1200$$ will grow to $$\$1250$$ in 8 months is approximately \(6.25\%\).

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Chapter 4

The Pirerras are planning to go to Europe 3 yr from now and have agreed to set aside $$\$ 150 /$$ month for their trip. If they deposit this money at the end of each month into a savings account paying interest at the rate of \(8 \% /\) year compounded monthly, how much money will be in their travel fund at the end of the third year?

Chapter 4

Find the effective rate of interest corresponding to a nominal rate of $9 \% /$ year compounded annually, semiannually, quarterly, and monthly.

Chapter 4

As a fringe benefit for the past 12 yr, Colin's employer has contributed $$\$ 100$$ at the end of each month into an employee retirement account for Colin that pays interest at the rate of \(7 \% /\) year compounded monthly. Colin has also contributed $$\$ 2000$$ at the end of each of the last 8 yr into an IRA that pays interest at the rate of \(9 \% /\) year compounded yearly. How much does Colin have in his retirement fund at this time?

Chapter 4

If a merchant deposits $$\$ 1500$$ at the end of each tax year in an IRA paying interest at the rate of \(8 \% /\) year compounded annually, how much will she have in her account at the end of 25 yr?

Chapter 4

A group of private investors purchased a condominium complex for $$\$ 2$ \(million. They made an initial down payment of \)10 \%$ and obtained financing for the balance. If the loan is to be amortized over \(15 \mathrm{yr}\) at an interest rate of \(12 \%\) /year compounded quarterly, find the required quarterly payment.

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