HUMBER INSTITUTE OF TECHNOLOGY AND ADVANCED LEARNING

Please print your full name: ___________________________________________________

(LAST) (FIRST)

Student Number: ___________________________________________________

Fall 2019 BMTH 100/120 Test 1 Form D

Instructions:

A. No summary sheets, notes, books, or scrap papers are allowed.

B. The BAII Plus calculator is the only calculator permitted.

C. No communication with individuals other than the examiner is permitted during the
test. This includes speaking with or exchanging any material such as calculators,
erasers, pens, or pencils with classmates.

D. Cell phones, tablets, laptops, or other such devices are not permitted.

E. All calculations must be shown in the space provided. Round all monies to dollars and
cents after each calculation. Show your answers clearly.

F. Part marks for partly correct answers may be awarded at the discretion of the
instructor based on calculations that are clearly shown in the space provided.

G. No part marks will be given for multiple choice questions, but all questions including
the multiple choice ones must show work.

H. Work must support answers. If the supporting work does not lead to the answer
shown, no marks will be given and a penalty may be assessed.

There are 12 questions. Please check that you have every sheet.

Total Marks: 30

Time: 90 minutes
Test 1D  BMTH 100/120, Fall 2019  Page 2 of 6 

1. What nominal rate of interest compounded quarterly is equivalent to an effective rate

of 13.75%? (1 mark)

a) 13.09%
b) 14.48%
c) 13.75%
d) 13.16%
e) 3.44%

2. A payment of $2,500 is received at the beginning of every quarter for 3 years and 6
months at 3.59% compounded quarterly. What type of annuity is this? (1 mark)

a) Ordinary simple annuity

b) Ordinary general annuity
c) Simple annuity due
d) General annuity due

3. An investment opportunity provides an interest rate of 8.75%. In order to earn the

greatest amount of interest, how would you like the rate to be compounded? (1 mark)

a) Daily
b) Monthly
c) Quarterly
d) Semi-annually
e) Annually

4. A bank is currently offering an interest rate of 5.05% compounded semi-annually on

one of its products. What is the equivalent nominal rate of interest compounded daily? (Round
your answer to two decimal places.) (2 marks)

Final Answer: ______________________

Test 1D  BMTH 100/120, Fall 2019  Page 3 of 6 

5. At what nominal rate of interest compounded daily will an investment triple in six
years and three months? (Round your answer to two decimal places.) (2 marks)

P/Y = C/Y =

N I/Y PV PMT FV

Final Answer: ______________________

6. Sandra made deposits of $3,500 at the end of every quarter for three years into a
savings account that provided an interest rate of 3.50% compounded quarterly. She left the
accumulated value to grow for another two years at a rate of 3.35% compounded monthly.
What is the amount in her savings account after these five years? (4 marks)

First three years:

P/Y = C/Y =

N I/Y PV PMT FV

Last two years:

P/Y = C/Y =

N I/Y PV PMT FV

Final Answer: ______________________

 
Test 1D  BMTH 100/120, Fall 2019  Page 4 of 6 

7. How much money should Nozomi invest today in a fund that earns interest at 6.35%
compounded quarterly if she wants to receive $1,200 at the end of every three months for ten
years? (3 marks)


P/Y = C/Y =

N I/Y PV PMT FV

Final Answer: ______________________

8. a) Horizon Inc. invested $25,000 of its profits at the end of every six months for seven
years. If money was worth 8.10% compounded annually, what was the accumulated value of
its investments? (2 marks)

P/Y = C/Y =

N I/Y PV PMT FV

Final Answer: ______________________

b) What was the total amount of interest earned? (1 mark)

Final Answer: ______________________

   
Test 1D  BMTH 100/120, Fall 2019  Page 5 of 6 

9. A company received a loan of $58,500 at 7.15% compounded monthly. Calculate the

time period of the loan if the total interest paid was $8,500. Express the answer in years and
months. (Round up to the next month.) (3 marks)

P/Y = C/Y =

N I/Y PV PMT FV

Final Answer: ______________________

10. (a) Vohra Inc. purchased some heavy machinery by making a down payment of
$30,000 and payments of $40,000 at the end of every year for four years. The interest rate was
4.98% compounded semi-annually. What was the purchase price of the equipment?
(3 marks)

P/Y = C/Y =

N I/Y PV PMT FV

Final Answer: ______________________

(b) What was the cost of financing? (1 mark)

Final Answer: ______________________

   
Test 1D  BMTH 100/120, Fall 2019  Page 6 of 6 

11. Giuseppe deposited $18,500 into a savings fund on December 18, 2014. What will be
the value of his fund on November 29, 2019 if the interest is 2.25% compounded semi-
annually? (2 marks)

P/Y = C/Y =

N I/Y PV PMT FV

Final Answer: ______________________

12. An architectural firm borrowed $350,000 from the bank. It repaid $150,000 at the end
of the third year and settled the loan at the end of the seventh year. During the first three
years, the interest charged was 5.75% compounded quarterly. During the last four years, the
interest charged was 5.95% compounded annually. What amount did the firm pay to
completely clear the loan at the end of the seventh year? (4 marks)

First three years:

P/Y = C/Y =

N I/Y PV PMT FV

Last four years:

P/Y = C/Y =

N I/Y PV PMT FV

Final Answer: ______________________