- Calculate the future value of $5,000 invested at 12% p.a. interest compounded semi-annually over 5 years.
- What principle would you have to deposit if you need $10,000 in 5 years invested at an interest rate of 12% p.a. compounded semi-annually
- Mr G Wizz deposited $5,000 on 1 January 1999 with Y.B. Heer Finance Company, receiving interest of 8% p.a. compounded quarterly. On 1 January 2001 interest rates were increased to 9% p.a. How much should Mr Wizz expect to receive in interest on 1 January 2004?
A TAFE graduate is anxious to purchase a used car, for which he estimates that he will need a total of $8,000. He currently has $6,200 and is offered two different investment plans. A and B. Under Plan A he would be paid simple interest at an annual rate of 5.4%, and under Plan B he would be paid an annual interest rate of 4.8% compounded monthly. Under each plan, how long would it be before he reached his target of $8,000?
- The Shady Bank is offering ‘unbeatable deals’ on its savings accounts, where it will pay interest that is compounded quarterly at an annual rate of 4%. Shannon wants to save $10,000 to purchase a car, but has only $8,000 to invest in the savings account on 1 June 2001. Under the bank’s deal, an approximately what date will Shannon reach her target?