MAT 1100 Quantitative Reasoning - Module 4 Lesson 5 Assignment 1

MAT 1100 Quantitative Reasoning Module 4 Lesson 5 Assignment 1
Student Name:
Find the simple interest. The rate is an annual rate unless otherwise noted. Assume 365 days in a year
and 30 days per month.
1) $5400 at 5% for 4 months
Simple Interest =
P = Principal Amount, R = Rate, T = time
Simple Interest =
Simple Interest = $90
Find the future value of the deposit if the account pays simple interest.
2) $2,500 at 3.3% for 3 years
Simple Interest =
P = Principal Amount, R = Rate, T = time
Simple Interest =
Future Value = $2,500 + $247.5 = $2747.5
Solve the problem. Assume that simple interest is being calculated in each case. Round the answer to the
nearest cent unless otherwise indicated.
3) Jonathan purchased new equipment for his yard maintenance business. He borrowed $2325 to pay for the
equipment, and agreed to pay off the loan in 9 months at 6% simple interest. Find the amount of interest he will
owe.
Simple Interest =
P = $2325, R = 6%, T = 9/12 = 3/4 years
Simple Interest =
Amount of Interest = $104.625
Use the compound interest formula to compute the future value of the investment.
4) $14,000 at 4% compounded quarterly for 2.5 years

MAT 1100 Quantitative Reasoning Module 4 Lesson 5 Assignment 1
Future Value =
P = Principal Amount, R = Rate, T = time, n = number of times compounded per year
Future Value =
Future Value = $15464.71
Find the compound interest earned by the deposit. Round to the nearest cent.
5) $1100 at 4% compounded quarterly for 2 years
Compound Interest =
P = Principal Amount, R = Rate, T = time, n = number of times compounded per year
Compound Interest =
Compound Interest =$1257.95
Find the present value for the given future amount. Round to the nearest cent.
6) A = $750,000, 30 years, r = 6% compounded semiannually
Future Amount =
P = Principal Amount/Present Value, R = Rate, T = time, n = number of times compounded per year
Present Value = $127300
Find the effective annual interest rate in your savings account. Suppose a savings and loan pays a nominal
rate of 2% on savings deposits. Find the effective annual yield if interest is compounded as stated in exercises 7)
and 8). (Give answers to the nearest thousandth of percent.)