ASSIGNMENT # 2

Course Title: Introduction to Mathematics

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Question no 01:
Find the simple interest earned on a deposit of $5,750 that is left on deposit for 3.5 years and earns an annual
interest rate of 4.5%.

Question no 02:
Three years after investing $15,000, a retired couple received a check for $3,375 in simple interest. Find the
annual interest rate their money earned during that time.

Question no 03:
For their newborn child, parents deposit $10,000 in a college account that pays 8% interest, compounded
annually. How much will be in the account on the child’s 17th birthday?

Question no 04:
If the parents of Question 3 invested $10,000 in an account paying 8%, compounded quarterly, how much
more money would they have after 17 years?

Question no 05:
A sum of $2500, 000 earns interest at a rate of 12% per year compounded quarterly. How long will it take the
investment to grow to $ 400, 000?

Question no 06:
What sum must be deposited today at 18% per year compounded monthly if the goal is to a compound amount
of $50, 000 six years from today? How much interest will be earned during this period?

Question no 07:
Given $400,000 today, determine the equivalent series of 24 semiannual payments which could be generated
beginning in 6 months. Assume interest can be earned at a rate of 7 percent per year compounded
semiannually.

Question no 08:
Determine the maximum affordable loan
1. Mortgage payment of $800, 10 percent interest, 25 years
2. Mortgage payment of $1350, 11.5 percent interest, 20 years

Question no 09:
An annuity makes 25 annual payments of Rs. 1,000 with the first payment coming today. What the future
value of this as of 25 years is from now if the interest rate is 9% compounded annually?

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Question no 10:
Determine whether the investment project depicted in given figure has a rate of return greater than or equal to
12 percent per year. What is the NPV at this interest rate?

Question no 11:
Your client is 40 years old and wants to begin saving for retirement. You advise the client to put Rs. 8,000 a
year into the stock market.  You estimate that the market’s return will be on average of 10% a year. Assume
the investment will be made at the end of the year.  How much money will she have by age 62 ?

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