Compound Interest - Assignment 1

What is the total amount that results from these two investments: $100 invested at 4% compounded quarterly and $50 invested at 6% compounded monthly after a period of 3 years?

• $172.52

• $172.04

• $168.72

• $178.65

• $173.63

A principal invested in a bank that gives interest rate of 2.5% p.a. will become $169.71 in five years of time. What will it become if it was invested in a bank that gives interest rate of 4.25% p.a. for three years?

• $169.95

• $171.02

• $168.75

• $169.12

• $173.54

A principal of €35,000 is invested at 11% interest compounded annually. After how many years will it have exceeded €350,000? (nearest approximation)

• 22

• 21

• 23

• 20

• 24

Mr. Raynhard deposits $1,500 into an account that pays an interest rate of 3.5% compounded annually. After seven years, he withdraws $300 from his account and move the rest of the money to a bank that pays an interest rate of 5% for the next three years. How much money will Mr. Raynhard have in those ten years of saving?

• $1861.95

• $1762.94

• $1861.03

• $1908.42

• $1606.42

A company earns $207,950 interest from a bank in which their $1,000,000 fund is deposited for three years. If they decide to move their money to another bank that offers interest rate 2% more than the current bank for the next two years, what is the amount of money they projected to have?

• $1,422,029

• $1,322,029

• $1,421,029

• $1,412,029

• $1,423,029

A fund is deposited in a bank that pays 5% rate of interest compounded semi-annually for two years. For the next three years the bank adjusted the interest rate to be 6% compounded monthly and the fund is understood to be $86,000,000 at the end of the fifth year. What is the amount of money at the beginning of time?

• $65,100,000

• $66,100,000

• $64,100,000

• $63,100,000

• $67,100,000

Two investment accounts are given below:

I. $100,000,000 in a bank that pays 5% interest rate compounded continuously.

II. $95,540,000 in a bank that pays 6% interest rate compounded semi-annually.

Calculate the time needed to make these two investments show equal amount of money in the future.

• t = 5 years

• t = 3 years

• t = 4 years

• t = 6 years

• t = 7 years

In 2020, a bank agreed to lend money to three struggling companies, as they all agree to make one-time payment in the future.

I. Company A was charged with 11% interest rate, must pay $30,802,500 in 2022.

II. Company B was charged with 12% interest rate, must pay $21,073,920 in 2023.

III. Company C was charged with 15% interest rate, must pay $20,113,572 in 2025.

Calculate how much money the bank lend in total in the year of 2020.

• $50,000,000

• $40,000,000

• $60,000,000

• $45,000,000

• $55,000,000