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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...

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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 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 daughter’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
24 Votes
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...
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