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    Interest and the Time Value of Money

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    Please help with the following:

    Section 5.1

    36, 40, 46, 52

    Section 5.2

    20, 38, 44, 52, 58, 68

    Section 5.3

    22, 34, 40

    36. Stock Growth A stock that sold for $22 at the beginning of
    the year was selling for $24 at the end of the year. If the
    stock paid a dividend of $.50 per share, what is the simple
    interest rate on an investment in this stock? (Hint: Consider
    the interest to be the increase in value plus the dividend.)

    40. Loan Interest A developer needs $80,000 to buy land. He
    is able to borrow the money at 10% per year compounded
    quarterly. How much will the interest amount to if he pays
    off the loan in 5 years?

    46. Effective Rate An advertisement for E*TRADE Bank
    boasted "We're ahead of banks that had a 160-year start,"
    with an APY (or effective rate) of 2.01%.* The actual rate
    was not stated. Given that interest was compounded
    monthly, find the actual rate.

    52. Doubling Time Suppose a conservation campaign coupled
    with higher rates causes the demand for electricity to
    increase at only 2% per year, as it has recently. Find the
    number of years before the utilities will need to double
    generating capacity

    20. Explain the difference between an ordinary annuity and an annuity due.

    Find the future value of each annuity due.
    38. $1500 deposited at the beginning of each semiannual period for 11 years at 5.6% compounded semiannually

    Find the amount of each payment to be made into a sinking fund so that enough will be present to accumulate the following amounts.
    Payments are made at the end of each period.
    44. $75,000; money earns 6% compounded semiannually for 4 ½ years

    52. Savings A father opened a savings account for his daughter
    on the day she was born, depositing $1000. Each year on her
    birthday he deposits another $1000, making the last deposit
    on her twenty-first birthday. If the account pays 9.5% interest
    compounded annually, how much is in the account at the
    end of the day on the daughter's twenty-first birthday?

    58. Buying Equipment Harv, the owner of Harv's Meats,
    knows that he must buy a new deboner machine in 4 years.
    The machine costs $12,000. In order to accumulate enough
    money to pay for the machine, Harv decides to deposit a
    sum of money at the end of each 6 months in an account
    paying 6% compounded semiannually. How much should
    each payment be?

    68. Buying Rare Stamps Paul Altier bought a rare stamp for
    his collection. He agreed to pay a lump sum of $4000 after
    5 years. Until then, he pays 6% simple interest semiannually
    on the $4000.

    Find the payment necessary to amortize each loan.
    22. $5500; 12.5% compounded monthly; 24 monthly payments

    34. Installment Buying Stereo Shack sells a stereo system
    for $600 down and monthly payments of $30 for the next
    3 years. If the interest rate is 1.25% per month on the
    unpaid balance, find
    a. the cost of the stereo system;
    b. the total amount of interest paid.

    Student Loans Student borrowers now have more options to
    choose from when selecting repayment plans.* The standard
    plan repays the loan in 10 years with equal monthly payments.
    The extended plan allows from 12 to 30 years to repay the loan.
    A student borrows $35,000 at 7.43% compounded monthly.
    40. Find the monthly payment and total interest paid under the
    standard plan.

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