MAT 1100 Quantitative Reasoning Module 4 Lesson 5 Assignment Solutions

This assignment solution covers various problems related to financial mathematics, including simple interest, compound interest, and present and future value calculations. The problems involve calculating simple interest on a given principal, rate, and time period, and finding the future value of an investment using the compound interest formula. The assignment also includes problems on calculating the compound interest earned, finding the present value for a given future amount, and determining the effective annual interest rate. Furthermore, the solution addresses problems related to the rule of 70 for estimating the annual inflation rate and solving problems related to credit card balances and finance charges. This assignment is part of the MAT 1100 Quantitative Reasoning course, which is designed to enhance students' understanding of mathematical concepts applied to real-world financial scenarios.

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

MAT 1100 Quantitative Reasoning Module 4 Lesson 5 Assignment 1
Use the compound interest formula to compute the future value of the investment.
4) $14,000 at 4% compounded quarterly for 2.5 years
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

MAT 1100 Quantitative Reasoning Module 4 Lesson 5 Assignment 1
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.)
7) Compounded monthly
i = rate%, n = number of times compounded per year
8) Compounded quarterly
i = rate%, n = number of times compounded per year
Solve the problem.
9) You have money in an account at 8% interest, compounded monthly. To the nearest year, how long will it
take for your money to double?

MAT 1100 Quantitative Reasoning Module 4 Lesson 5 Assignment 1
Amount =
P = Principal Amount, R = Rate, T = time, n = number of times compounded per year
Amount = 2P
Taking log both side
10) Use the rule of 70 to estimate the annual inflation rate (to the nearest tenth of a percent) that would cause
the general level of prices to double in 16 years.