Question 1

Calculate the term of the loan or investment:

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Question 2

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.

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Question 3

How long will it take a $1,000 investment to grow to $1500 if it earns 3.8% compounded annually?

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Question 4

If the number of workers in the forest industry in Canada declined by 41% from the end of 1993 to the beginning of 2009, what was the compound annual rate of attrition in the industry?

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Question 5

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.

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Question 6

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?

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Question 7

Calculate the term of the loan or investment:

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Question 8

For an investment to triple in value during a 15-year period.
a) What annually compounded rate of return must it earn?
b) What quarterly compounded rate of return must it earn?
c) What monthly compounded rate of return must it earn?

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Question 9

Calculate the term of the loan or investment:

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Question 10

A number of years ago, your client invested $6,000 at a rate of return of 9% compounded annually. If the investment is currently worth $10,968.25, for how long has she held the investment?

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Question 11

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.

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Question 12

The maturity value of a four-year, $1,000 investment, is $1175.65. Calculate the nominal rate of interest paid on the investment if interest was compounded quarterly.

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Question 13

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?

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

Question 14

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?

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

Question 15

Monty purchased a strip bond for his RRSP. He paid $3,800 for a $5,000 face value bond with three years remaining until maturity. What semiannually compounded rate of return will he realize over the three years?

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Question 16

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?

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Question 17

What compound annual rate of return is required for an investment to double in:
a) 12 years?
b) 10 years?
c) 8 years?
d) 6 years?

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Question 18

Calculate the term of the loan or investment:

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Question 19

Your client wants to invest a $250,000 inheritance and grow it to $325,000. Rounded to the nearest month, how long will this take if the investment earns 7% compounded annually?

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Question 20

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

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

Quiz 9: Compound Interest: Further Topics and Applications

Calculate the term of the loan or investment:

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.

How long will it take a $1,000 investment to grow to $1500 if it earns 3.8% compounded annually?

If the number of workers in the forest industry in Canada declined by 41% from the end of 1993 to the beginning of 2009, what was the compound annual rate of attrition in the industry?

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.

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?

Calculate the term of the loan or investment:

For an investment to triple in value during a 15-year period. a) What annually compounded rate of return must it earn? b) What quarterly compounded rate of return must it earn? c) What monthly compounded rate of return must it earn?

Calculate the term of the loan or investment:

A number of years ago, your client invested $6,000 at a rate of return of 9% compounded annually. If the investment is currently worth $10,968.25, for how long has she held the investment?

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.

The maturity value of a four-year, $1,000 investment, is $1175.65. Calculate the nominal rate of interest paid on the investment if interest was compounded quarterly.

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?

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?

Monty purchased a strip bond for his RRSP. He paid $3,800 for a $5,000 face value bond with three years remaining until maturity. What semiannually compounded rate of return will he realize over the three years?

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?

What compound annual rate of return is required for an investment to double in: a) 12 years? b) 10 years? c) 8 years? d) 6 years?

Calculate the term of the loan or investment:

Your client wants to invest a $250,000 inheritance and grow it to $325,000. Rounded to the nearest month, how long will this take if the investment earns 7% compounded annually?

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