Question 1. How long will it take double if invested at 12% compounded monthly?
Question 2. Colortime Rent To Own sells a compact disk stereo for $3,000. You pay one third down and amortize the rest with equal payments over a 2 year period. If you are charged 1.5% interest per month on the unpaid balance.
a) What is your monthly payment?
b) How much interest will you pay over the 2 years?
Question 3. Two years ago you borrow $10,000 at 12% interest compounded monthly which was to be amortized over 5 years. Now you have acquired some additional funds and decide that you want to pay off this loan. What is the unpaid balance after making equal monthly payments for 2 years?
a) Find the monthly payment
b) Find the present market value of $222.44 a month 5 year annuity (3 years left)
Question 4. Starting on his 21st birthday, and continuing on every birthday up to and including his 65th, if the account earns:
a) 7% compounded annually
b) 11% compounded annually
Question 5. A company established a sinking fund for plant retooling in 6 years at an estimated cost of $850,000.
a) How many should be invested semiannually into an account paying 8.76% compounded semiannually?
b) How much interest will you earn in the 6 years?