| Student Name | ID |
|---|---|
| Nguyen Thi Tuong Vy | MAMAIU17034 |
| Doan Ha Anh Thu | MAMAIU17000 |
| Tran Thanh Dat | MAMAIU17036 |
| Bui To Mai | MAMAIU17022 |
Suppose you commit 200,000,000(VND) to invest a project that give you a fixed rate of return 15% per year for the next 10 years. If interest obtained from each year is also reinvested to the project, how many years needed for the accumulated money become triple the original money?
\[D(1+r)^n = 3D\] \[n=\frac{ln(3)}{ln(1+r)}=\frac{ln(3)}{ln(1.15)}\approx 7.86\]
Suppose you commit 500,000,000(VND) to invest a project that give you a fixed rate of return -25% per year for the next 10 years. If interest obtained from each year is also reinvested to the project, how many years needed for the accumulated money become half the original money?
Fred Derf found his lost passbook for a saving account that he had opened with a $100 deposit 12 years ago. If the bank paid interest at a rate of 5% compounded annually over this period, what should be the balance in the account today?
Suppose a bank offer a loan for 2 years with fixed interest rate 9% per year compounded daily. Assume that a year has 365 days and 12 months, what is the equivalent interest rate (per month) compounded monthly for the loan.
Suppose when you were 8 years old, your parents invested $P in a bank account with interest rate r = 7% compounded annually so that in n = 10 years later they can obtain F = $50,000 for your university study. What is P?
Joe invests £2000 at 3.9% per annum with interest compounded twice yearly. What is the equivalent with the interest compounded annually?
Interest is charged at 3.67% per year, compounded monthly. What is the equivalent annually compounded rate?
Sarah can borrow £20,000 and pay interest at 6% per year (compounded annually). What is the equivalent rate when interest is compounded quarterly?
An investment company offers investors a rate oof 4.75% per year compounded quarterly. What would be the equivalent rate with interest compounded twice yearly?
If interest is paid at 5.2% per year compounded annually, what will be the equivalent continuously compounded rate?
When £5,000 is invested for six months, the interst is £200. (i) What is the (annually compounded) rate of interest? (ii) What whould be the equivalent continuously compounded rate?
Which of the following two annual rates would be more attractive to an investor 6.4% compounded daily or 6.395% compounded continuously?
Amy McPhee wishes to invest £5,000,000 for one month. Which interest rate should she choose? (i) AAABank offering 6.13% per year, simply compounded. (ii) FriendlyBank offering 6.3% per year compounded annually. (iii) InvestandGrow offering 6.2% per year compounded semi-annually. (iv) MoneyValue offering 6.11% per year compounded continuously.
I am offered interest rates of: 5.5% per annum compounded quarterly 5.49% per year compounded monthly 5.6% per year compounded semi-annually 5.48% per year compounded continuously Which rate should I choose if I plan to (i) invest money? (ii) borrow money?
Alan owes £5,000 on his credit card. At the end of the first week, the company charges interest of £20.19. If the company is charging a compounding rate and Alan did not pay off any part of the debt in the meantime, how much did the company charge at the end of the fourth week?
Oleg owes £100,000. The interest charged is 15% (per year) compounded daily. How many days before Oleg’s debt is more than £1,000,000? (Assume no repayments are made until the £1,000,000 has been reached)
The interest rate today is 6.5% per year (annually compounded). What is the value today of: (i) £5,000 to be received in two years’ time? (ii) £10,000 to be received in six months’ time? (iii) £10,000,000 to be received in five years’ time?
PJ Furnishing has to pay $100,000 in two years’ time. The interest rate today (continuously compounded) is 5.5%. How much should the company set aside today?
Similla is to receive £20,000 in seven years’ time. The interest rate is 6.5%, compounded semi-annually. What is the value today of this legacy?
Andrew will be paid £8,500 in two years’ time. What is the value of this amount today if the interest rate (compounded quarterly) is 6.8% per year?
FirstInvestors wants to invest a sum of money today to ensure it will have £100,000 in two years’ time. Several interest rate are available:
Interest rate (per year) Compounded 6.88 Annually 6.75 Semi- annually 6.68 Monthly 6.65 Continuously Which interest rate should it choose?
An investment company will receive $15,000 in one year, $17,000 in two years, $21,000 in three years, $5,000 in four years and $3,000 in five years. The interest rates with these maturities are as shown in the table:
Maturity (years) Interest rates (per year) compounded annually 1 6.6 2 6.8 3 6.95 4 7.1 5 7.2 What is the value today of these future payments?
Mary invests £9,956 today and in three months’ time she will have £10,000. What semi-annually compounded interst rate has she used?
A bank will receive $10,000 in two years’ time and $20,000 in four years’ time. The interest rate with a two-year maturity is 5.8% per year with quarterly compounding. The bank would like to borrow $24,000 today and use the money it is to receive in two years and in four years to pay off the loan. What interest rate (compounded quarterly) with a maturity of four years will it need?
A share in XAY company costs £7.38 on the London Stock Exchange. This share is selling for $13.14 on the New York Stock Exchange. The exchange rate is £1 = $1.775. What should I do? What assumptions have you made to calculate your answer?