Question 1

Your client invests $10,000 today at a rate of return of 7.7% compounded quarterly. Rounded to the nearest month, how long will it take the investment to grow to $22,000?

Accepted Answer

The answer of Your client invests $10,000 today at a...

Question 2

An investor's portfolio increased in value from $35,645 to $54,230 over a six-year period. At the same time, the Consumer Price Index rose by 26.5%. What was the portfolio's annually compounded real rate of return?

Accepted Answer

The answer of An investor's portfolio increased in value from...

Question 3

How long will it take an investment to double in value if it earns 4.5% compounded quarterly?

Accepted Answer

The answer of How long will it take an investment...

Question 4

Rounded to the nearest month, how long before a scheduled payment of $10,000 would a payment of $5,000 be an economically equivalent alternative? Assume money is worth 5% compounded annually.

Accepted Answer

The answer of Rounded to the nearest month, how long...

Question 5

A $5,000 investment was purchased for $4220.50. The bond paid interest at a rate of 3.8% compounded semi-annually until the maturity date. What was the term of the investment?

Accepted Answer

The answer of A $5,000 investment was purchased for $4220.50....

Question 6

At the end of 2012, the RBC Canadian Dividend Fund was the largest equity mutual fund in Canada. The aggregate market value of its holdings at the end of 2012 was $9.995 billion. The fund's annual returns in successive years from 2003 to 2012 inclusive were 28.3%, 4.4%, -0.5%, 23.5%, 12.9%, 21.1%, 15.1%, 3.0% - 27.0%, and 27.3% respectively. For the 3-year, 5-year, and 10-year periods ending December 31, 2012, what were the fund's equivalent annually compounded returns?

Accepted Answer

The answer of At the end of 2012, the RBC...

Question 7

Kristina was earning $10.00 an hour four years ago. Today, she earns $13.50 an hour. At what equivalent compound annual rate has her salary grown over the four years?

Accepted Answer

The answer of Kristina was earning $10.00 an hour four...

Question 8

At the end of 2012, the Trans IMS Canadian Growth Fund had one of the worst 10-year compound annual returns of any Canadian diversified equity mutual fund. The fund's annual returns in successive years from 2000 to 2009 inclusive were -12.8%, -38.3%, -24.1%, 25.4%, 9.2%, 18.6%, 12.0%, -0.2%, -38.5%, and 15.6%, respectively. For 3-year, 5-year, and 10-year periods ended December 31, 2012, what was the fund's equivalent annually compounded return?

Accepted Answer

The answer of At the end of 2012, the Trans...

Question 9

A few years ago, Larissa invested $1500 at 3.75% compounded quarterly. If the investment is worth $1693.46 today, how many years ago did Larissa make the investment?

Accepted Answer

The answer of A few years ago, Larissa invested $1500...

Question 10

A $6,000, three-year promissory note bearing interest at 11% compounded semiannually was purchased 15 months into its term for $6,854.12. What monthly compounded discount rate was used in pricing the note?

Accepted Answer

The answer of A $6,000, three-year promissory note bearing interest...

Question 11

The Canadian Consumer Price Index (based on a value of 100 in 1971) rose from 97.2 in 1970 to 210.6 in 1980 and (based on a value of 100 in 1986) rose from 67.2 in 1980 to 119.5 in 1990. Calculate the annual rate of inflation for the period 1970-1990.

Accepted Answer

The answer of The Canadian Consumer Price Index (based on...

Question 12

Advances in technology have improved the rate of production of widgets over the last 10 years and the number of plant workers required has declined by 25%. What is the equivalent annual rate of decrease during the period?

Accepted Answer

The answer of Advances in technology have improved the rate...

Question 13

An investment earned 6% compounded semiannually for two years and 8% compounded annually for the next three years. What was the equivalent annually compounded rate of return for the entire five-year period?

Accepted Answer

The answer of An investment earned 6% compounded semiannually for...

Question 14

At the end of 2009, the Industrial Alliance (IA) Group Dividends Fund had the best 10-year compound annual return of any Canadian diversified equity mutual fund. During the 10-year period, this fund invested primarily in the shares of large Canadian companies. The fund's annual returns in successive years from 2000 to 2009 inclusive were 33.5%, 9.2%, 2.2%, 25.8%, 17.9%, 27.9%, 19.7%, 6.3%, -26.0%, and 21.5%, respectively. For 3-year, 5-year, and 10-year periods ended December 31, 2009, what was the fund's equivalent annual compounded return?

Accepted Answer

The answer of At the end of 2009, the Industrial...

Question 15

How long will it take a $2,000 investment to grow to $2501.50 if it earns 4.5% compounded quarterly?

Accepted Answer

The answer of How long will it take a $2,000...

Question 16

The Consumer Price Index (based on a value of 100 in 1986) rose from 67.2 in 1980 to 119.5 in 1990. What was the (equivalent) annual rate of inflation in the decade of the 1980s?

Accepted Answer

The answer of The Consumer Price Index (based on a...

Question 17

For three successive years, an investment paid annual rates of return of 3.5%, 4.8%, and 2.75%. Calculate the funds equivalent annually compounded rate of return over the three years.

Accepted Answer

The answer of For three successive years, an investment paid...

Question 18

An investment grew in value from $5,630 to $8,485 during a five-year period. The annual rate of inflation for the 5 years was 2.3%. What was the compound annual real rate of return during the five years?

Accepted Answer

The answer of An investment grew in value from $5,630...

Question 19

If money is worth 8% compounded quarterly, how long (to the nearest day) before a scheduled payment of $6,000 is $5,000 an equivalent payment? For the purpose of determining the number of days in a partial calendar quarter, assume that a full quarter has 91 days.

Accepted Answer

The answer of If money is worth 8% compounded quarterly,...

Question 20

The Canadian Consumer Price Index (based on a value of 100 in 1971) rose from 97.2 in 1970 to 113.5 in 1980. What was the (equivalent) annual rate of inflation in the decade of the 1970s?

Accepted Answer