Question 1

How much more will an investment of $10,000 be worth after 25 years if it earns 6% compounded annually instead of 5% compounded annually? Calculate the difference in dollars and as a percentage of the smaller maturity value.

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Question 2

How much more will an investment of $10,000 earning 8% compounded annually be worth after 15 years than after 10 years? Calculate the difference in dollars and as a percentage of the smaller maturity value.

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Question 3

Calculate the periodic interest rate for 3.8% compounded quarterly.

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Question 4

Daniel makes annual payments of $2,000 to the former owner of a residential lot that he purchased a few years ago. At the time of the fourth from last payment, Daniel asks for a payout figure that would immediately settle the debt. What amount should the payee be willing to accept instead of the last three payments, if money can earn 8.5% compounded semi-annually?

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Question 5

Ross has just been notified that the combined principal and interest on an amount that he borrowed 27 months ago at 11% compounded quarterly is now $2297.78. How much of this amount is principal and how much is interest?

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Question 6

To motivate individuals to start saving at an early age, financial planners will sometimes present the results of the following type of calculation. How much must a 25-year-old individual invest 5 years from now to have the same maturity value at age 55 as an immediate investment of $1,000? Assume that both investments earn 8% compounded annually.

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Question 7

Calculate the maturity value:

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...

Question 8

Calculate the missing value:

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...

Question 9

What will be the maturity value of $800 invested at 3.75% compounded quarterly after five years?

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Question 10

Calculate the missing value:

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...

Question 11

How much more will an investment of $10,000 be worth after 25 years if it earns 5% compounded annually instead of 4% compounded annually? Calculate the difference in dollars and as a percentage of the smaller maturity value.

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Question 12

Suppose an individual invests $1,000 at the beginning of each year for the next 30 years. Thirty years from now, how much more will the first $1,000 investment be worth than the 16^th $1,000 investment if both earn 8.5% compounded annually?

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Question 13

Calculate the original principal:

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...

Question 14

Calculate the missing value:

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Question 15

How much more will an investment of $10,000 earning 8% compounded annually be worth after 25 years than after 20 years? Calculate the difference in dollars and as a percentage of the smaller maturity value.

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Question 16

Calculate the missing value:

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...

Question 17

Calculate the periodic interest rate for 4.8% compounded monthly.

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Question 18

Calculate the missing value:

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...

Question 19

Calculate the missing value:

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...

Question 20

What amount today is equivalent to $10,000 four years ago, if money earned 5.5% compounded monthly over the last 4 years?

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Quiz 8: Compound Interest: Future Value and Present Value

How much more will an investment of $10,000 be worth after 25 years if it earns 6% compounded annually instead of 5% compounded annually? Calculate the difference in dollars and as a percentage of the smaller maturity value.

How much more will an investment of $10,000 earning 8% compounded annually be worth after 15 years than after 10 years? Calculate the difference in dollars and as a percentage of the smaller maturity value.

Calculate the periodic interest rate for 3.8% compounded quarterly.

Ross has just been notified that the combined principal and interest on an amount that he borrowed 27 months ago at 11% compounded quarterly is now $2297.78. How much of this amount is principal and how much is interest?

Calculate the maturity value:

Calculate the missing value:

What will be the maturity value of $800 invested at 3.75% compounded quarterly after five years?

Calculate the missing value:

How much more will an investment of $10,000 be worth after 25 years if it earns 5% compounded annually instead of 4% compounded annually? Calculate the difference in dollars and as a percentage of the smaller maturity value.

Suppose an individual invests $1,000 at the beginning of each year for the next 30 years. Thirty years from now, how much more will the first $1,000 investment be worth than the 16th $1,000 investment if both earn 8.5% compounded annually?

Calculate the original principal:

Calculate the missing value:

How much more will an investment of $10,000 earning 8% compounded annually be worth after 25 years than after 20 years? Calculate the difference in dollars and as a percentage of the smaller maturity value.

Calculate the missing value:

Calculate the periodic interest rate for 4.8% compounded monthly.

Calculate the missing value:

Calculate the missing value:

What amount today is equivalent to $10,000 four years ago, if money earned 5.5% compounded monthly over the last 4 years?

Suppose an individual invests $1,000 at the beginning of each year for the next 30 years. Thirty years from now, how much more will the first $1,000 investment be worth than the 16^th $1,000 investment if both earn 8.5% compounded annually?