## Quiz 9 :

Compound Interest: Further Topics and Applications

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A 30-year, $1,000 strip bond was traded for $167, four years after it was issued. What was the semi-annually compounded nominal rate at that time?

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B

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If the population of Green City is growing at a rate of 5% per year, how long will it take to grow from 2,300 to 10,000?

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E

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Twenty years ago the population of a village in Newfoundland was 964. Now it is 612. At what average annual rate has the population of the village declined over the last 20 years?

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Answer:

C

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Albert Greco paid $1,974 for a $10,000 strip bond 16 years before it reached maturity. What semi-annually compounded nominal rate will Albert earn on his investment?

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A demand loan for $8,000 with interest at 16% compounded quarterly was repaid after two years and eight months. What was the amount of interest paid?

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If the population of Dodge City is decreasing at a rate of 19% per year, how long will it take to decrease from 7,700 to 2,000?

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At what quarterly compounded nominal interest rate will money double in 75 months?

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At what annually compounded interest rate will an investment of $71,294.69 double in 90 months?

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Sollozo just made a single payment to repay a loan he had with the Corleone Finance Company. He paid a total of $86,500 which included interest of $56,500 at 48% compounded monthly. How long ago was the money borrowed?

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A $50,000 strip bond was discounted to $21,680. The market rate was 7.4% compounded semi-annually. How much time was left before the bond reached maturity?

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Maury invested $5,000 in a selection of high-tech stocks. After six years of careful trading, his investments were worth $79,700. At what quarterly compounded nominal rate did his investments grow?

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A six-year, $20,000 GIC has a maturity value of $29,625. Calculate the semi-annually compounded nominal interest rate.

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At 11.4% compounded quarterly, how long will it take for money to double?

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A $50,000 GIC will earn $70,000 of interest over its 10-year term. What is the monthly compounded nominal rate of interest?

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The Wilsons bought their home 16 years ago for $128,000. Its value now is $141,000. At what annual rate has the value of their home appreciated since they bought it?

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Rounded to the nearest month, how long will it take for $25,000 to grow to $35,000 at 9% compounded quarterly?

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What amount invested at 10% compounded semiannually will be worth $6380.00 after 38 months?

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Seven years before it matures the value of a $1,000 strip bond is $672. What is the semi-annually compounded nominal interest rate?

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At 14% compounded annually, an investment of $50,000 will grow to $1,000,000 in 22.86 years. How much longer will it take at 11% compounded annually?

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What is the term of a compound-interest Guaranteed Investment Certificate if $8,500 invested at 6.1% compounded annually will earn interest totaling $4,365.50?

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