Calculate the final value of the following investments:
Calculate how much is owed at the end of the following loan periods:
Emma wants to invest \$1400 at 5\% p.a for 5 years. She has two investment options, compounding quarterly or compounding monthly.
Calculate the value of the investment if it is compounded quarterly.
Calculate the value of the investment if it is compounded monthly.
Calculate how much extra the investment is worth if it is compounded monthly rather than quarterly.
Maria has \$9000 to invest for 5 years and would like to know which investment plan to enter into out of the following three.
Plan 1: invest at 4.51\% p.a. interest, compounded monthly
Plan 2: invest at 6.16\% p.a. interest, compounded quarterly
Plan 3: invest at 5.50\% p.a. interest, compounded annually
Calculate the future value of the investment under Plan 1.
Calculate the future value of the investment under Plan 2.
Calculate the future value of the investment under Plan 3.
Which investment plan yields the highest return?
\$5000 is deposited into an account that attracts interest at a rate of 3.4\% per annum. Find how much is in the account after 8 years if:
interest is compounded annually.
interest is compounded monthly.
simple interest is used instead of compound interest.
Sean borrows \$7000 at a rate of 5.5\% p.a. compounded weekly. If she pays off the loan in a lump sum at the end of 5 years, find how much interest she pays. Assume there are 52 weeks in a year.
Calculate the amount of interest earned on the following investments:
Pauline borrows \$50\,000 at a rate of 5.4\% per annum. If she pays off the loan in a lump sum at the end of 7 years, find how much interest she pays if the interest is compounded:
Daily
Monthly
Quarterly
Katrina borrows \$6500 at a rate of 6.6\% p.a. compounded semi-annually. If she pays off the loan in a lump sum at the end of 5 years, find how much interest she pays.
Jenny applies for a loan of \$9000 over 3 years and she is offered the choice between two loan rates:
Rate 1: Simple interest at a rate of 3\% p.a.
Rate 2: Compound interest at a rate of 2.5\% p.a. compounded daily.
How much simple interest would she pay if she chose the first loan?
How much compound interest would she pay if she chose the second loan? Assume there are 365 days in a year.
Which rate should Jenny choose? Explain your answer.
Frank is working out the compound interest accumulated on his loan. He writes down the following working:
A = 6000\left(1+\dfrac{0.08}{4}\right)^{(7\times4)}
How much did he borrow in dollars?
What is the annual interest rate as a percentage?
Is the interest being compounded weekly, monthly, quarterly or annually?
For how many years is he accumulating interest?
How much interest does he pay?
After 8 years, Ally's investment is worth \$24\,900. Her investment grew at a rate of 12\% p.a. compounded monthly. How much money did Ally initially invest?
After 11 years, Kyle paid back his loan which had acuumulated to \$36\,840. His loan had an interest rate of 12\% p.a. compounded quarterly. How much money did Kyle initially borrow?
Mae's investment into a 20-year 2.33\% p.a. corporate bond grew to \$13\,600. Calculate the size of Mae's initial investment if interest was compounded:
Annually
Half-yearly
Quarterly
Monthly
Weekly, assuming there are 52 weeks in a year.
Daily, assuming there are 365 days in a year.
Carl is expecting a Christmas bonus of \$1800 in 4 months time. What is the most he can borrow now, at a rate of 4.1\% p.a. compounded daily, and still be able to pay off the loan with his bonus?