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# Assignment #1: What is the ordinary simple interest on 1,200 for the

period from January 16 to November 26, 1992, if the rate of interest is 24%?
What is the value of the principal at the end of the period?

I = Pin
I = 1,200 (24%) (

F=P+I
10 ( 30 ) +10
)
360

I = 248.00

F = 1,200 + 248
F = 1,448.00

## Assignment #2: How much must be invested now at 6% simple interest to

accumulate 1,000 at the end of five years?
P=

P=

1,000
( 6 ) (5)

P = 3333.33

Assignment #3:
Assignment #4: Suppose that an investor wishes to deposit an amount now
so that in thirty years 1,000,000 will be in an account that pays 10%
interest per year compounded annually. What amount must be deposited
now?

P = F ( 1 + i )-n
P = 1,000,000 ( 1 + 10% )-30
P = 57308.55
Assignment #5: If the rate of interest is 10% compounded semiannually,
what is the semiannual interest rate?

i=

r
m

i=

10
2

i=5%
Assignment #6: If the quarterly rate of interest is 15%, what is the nominal
rate of interest?

r = im
r = (15%)(4)

r = 60 %

Assignment #7: If the annual rate of interest is 20%, what is the nominal rate
of interest?

r = im
r = (20%)(1)
r = 20 %

Assignment #8:
Effective Rates of Interest for various Nominal Rates of Interest
No. of
Nominal Rates of Interest
Compounding
Compounding
5%
10%
15%
20%
Frequency
Periods
Annually
1
Semiannually
2
Quarterly
4
Bimonthly
6
Monthly
12
Daily
365
Assignment #9: If 1,000 is to be invested for three years at an interest rate
of 12% compounded semiannually, how much is the interest earned? What is
the effective rate of interest?
Assignment #10: If you want to invest your money, which rate of interest
would you prefer?
a.) 12% simple interest
b.) 12% compounded annually
c.) 12% compounded semiannually
d.) 12% compounded monthly