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# 1) A car valued at \$11,400 can be purchased for 10% down and monthly payments of \$286.21 for three-and-a-half years. What is the nominal rate of interest compounded annually?2) To finance the...

1) A car valued at \$11,400 can be purchased for 10% down and monthly payments of \$286.21 for three-and-a-half years. What is the nominal rate of interest compounded annually?

2) To finance the development of a new product, a company borrowed \$39750 at 7% compounded monthly. If the loan is to be repaid in equal quarterly payments over 7 years and the first payment is due three months after the date of the loan, what is the size of the quarterly payment?

3) A mortgage of \$320000 is to be repaid by making payments of \$19500 at the end of every six months. If interest is 7% compounded semi-annually:

A) Calculate the total number of payments during the term of the mortgage?

B) what is the term of the mortgage?

4) A car was purchased for \$1500 down and payments \$265 of at the end of each month for 4 years. Interest is 7% compounded quarterly.

A) What was the purchase price of the car?

B) How much interest will be paid?

5) Gwen has invested an inheritance in a fund paying 6% compounded quarterly, for her daughterâ€™s education. If ordinary annuity payments of \$184 per month are to be made out of the fund for 8 years, how much was the inheritance?

6) A trust fund is set up to make payments of \$9500 at the end of each quarter for 15 years. Interest on the fund is 6% compounded quarterly.

A) How much will be paid out of the fund?

B) How much interest is earned by the fund?

**7) A tailor purchased a new equipment by making a down payment of \$2000 and agreeing to make payments of \$450 at the end of each month for 5 years. Interest is 9.2% compounded monthly.**

A) What was the purchase price of the new equipment?

B) How much interest will have to be paid?

**8) Mr. Salomon accumulated \$190000 in an RRSP. He then started to withdraw \$4600 at the end of every three months from the fund. If interest is 7% compounded monthly, for how long can Mr. Salomon make withdrawals?**
Answered Same Day Nov 14, 2022

## Solution

Prateek answered on Nov 14 2022
Question 1
Inputs:
Car Value    11,400
Down Payment    10%
Monthly Payment    286.21
Time (in months)    42
Rate    ?
Solution:
Down Payment    1,140
Remaining Amount    10,260
Rate    1%
Annual Rate    9.11%
Question 2
Inputs:
Amount Bo
owed    39750
Rate (Monthly Compounding)    7%
Time    28
PMT    ?
Solution:
EAR    7.23%
Quarterly Payment    1,821.52
Question...
SOLUTION.PDF