Problem 1. Your loan $12,000 to your brother-in-law at 10% interest for six months. At the end of 6 months, you calculate how much he owes you and calculate the interest on that amount for the next six-month period. This continues for three years.
Make a table showing how the amount owed increases.
Months Amount Due
0 $12,000.00
6
12
18
24
30
36
Problem 2. Continuing this same process, calculate how much your brother-in-law will owe you 6 years after the loan was made.
A. If $125,000 is invested and receives a return of 8.4% compounded quarterly, what will it be worth in 16 years?
B. Find the Principle that will grow into $1,000,000 in 20 years at 10% compounded annually.
C. I want to set some money aside now so that I will have $60,000 for a down-payment on a house ten years from now. If I can put it in an account paying 9% compounded semi-annually, how much money must I deposit now?
D. A bank loans me $1,000 at 12% compounded monthly. Determine how much I owe them in one year. How much of this is interest? What is the interest of the original loan?
E. If you deposit $100 at 5% compounded annually, how long will it take to double your money?
F. If I borrow money from Jerry he will charge me 10% simple interest.
George will charge me only 9% compounded daily.
Who will charge me the most on a 1-year loan of $10,000?
Who will charge me the most on a 5-year loan of $10,000?