1. For each situation, determine.
i. the present value of
ii. the interest earned on
a. a loan of $11 200 due in 5 years, with interest of 4.4%/a compounded quarterly.
b. an investment that will be worth $128 500 in 8 years. The interest rate is 6.5%/a, compounded semi-annually.
2.
a)On the day his son is born, Mike wishes to invest a single sum of money that will grow to $10 000 when his son turns 21. If Mike invests the money at 4%/a, compounded semi-annually, how much must he invest today?
b). Barry bought a boat two years ago and at the time paid a down payment of $10 000 cash. Today he must make the second and final payment of $7500, which includes the interest charge on the balance owing. Barry financed this purchase at 6.2%/a, compounded semi-annually. Determine the purchase price of the boat.
c). Today Brianna has $7424.83 in her bank account. For the last two years, her account has paid 6%/a, compounded monthly. Before then, her account paid 6%/a compounded semi-annually, for four years. If she made only one deposit six years ago, determine the original principal.
