MAP4C - Grade 12 Math: Lesson 10 Assignment on Compound Interest

This document presents the solutions for the MAP4C Lesson 10 assignment, focusing on compound interest calculations. The assignment requires students to utilize the compound interest formula to determine the principal needed to achieve a specific future value, considering different compounding periods such as semi-annually, quarterly, annually, and monthly. The solutions include the application of the formula, identification of the given values (A, r, n, t), and the correct answers for each multiple-choice question. The assignment covers various scenarios, including investments with different interest rates and time periods, providing a comprehensive understanding of compound interest principles. The student provides the correct clues and answers for each question, demonstrating a clear understanding of how to calculate the principal required for an investment to reach a target amount within a specified timeframe. The solution demonstrates the use of the compound interest formula and the correct application of the values to arrive at the accurate answers.

MAP4C Lesson 10 Assignment
In this assignment you are going to explore the characteristics of compound interest
Make sure you answer all questions in the spaces provided
Part A: Finding the Answer
In this section, you are going to use the formula for calculating compound interest to find the answer.
For each question, answer the question giving the clues that you used in determining your answer. You will be given two
marks – four mark for your correct clues and one mark for the correct answer.
___d_ 1. To yield $8000 in three years in an investment that pays interest at a rate of 5% per year, compounded semi-
annually, how much would you have to invest?
a. $6691.10 b. $6716.95 c. $6887.81 d. $6898.37
__c__ 2. To yield $5000 in two years in an investment that pays interest at a rate of 7.25% per year, compounded
quarterly, how much would you have to invest?
a. $4000.91 b. $4327.00 c. $4330.73 d. $4449.98
___b_ 3. To yield $2500 in five years in an investment that pays interest at a rate of 4.5% per year, compounded
annually, how much would you have to invest?
a. $1997.13 b. $2006.13 c. $2047.68 d. $2054.82
Page 1
A= 8000, r = 5 %, n = 2, t = 3
Using formula P = A / (1 + r/n) nt
P = $6898.37
A= 5000, r = 7.25 %, n = 4 , t = 2
Using formula P = A / (1 + r/n) nt
P = $4330.73
A= 2500, r = 4.5 %, n = 1 , t = 5
Using formula P = A / (1 + r/n) nt
P = $2006.13

__c__ 4. An investment fund pays 9% per year, compounded quarterly, on all money invested. How much must be
invested now to have $10 000 when it is needed six years from now?
a. $5962.67 b. $5896.64 c. $5862.47 d. $5839.24
__d__ 5. An investment fund pays 12% per year, compounded monthly, on all money invested. How much must be
invested now to have $6000 when it is needed four years from now?
a. $3813.11 b. $3764.47 c. $3739.00 d. $3721.56
__c__ 6. Evan wants to put some money into an investment fund that has paid, on average, 13.2% per year,
compounded semi-annually over the past 10 years. How much should he put into the fund if he wants to have
$10 000 four years from now?
a. $5914.86 b. $5948.33 c. $5997.11 d. $6089.96
Page 2
A= 10000, r = 9 %, n = 4 , t = 6
Using formula P = A / (1 + r/n) nt
P = $5862.47
A= 6000, r = 12 %, n = 12 , t = 4
Using formula P = A / (1 + r/n) nt
P=$3721.56
A= 10000, r = 13.2 %, n = 2 , t = 10
Using formula P = A / (1 + r/n) nt
$10,000

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