Purpose of Assignment
The purpose of this assignment is to provide students an opportunity to practice and learn the time-value of money concepts covered during Week 4. Students will understand how to evaluate future values, present values, interest rates, and time periods for financial investments.
Resources: Quantitative Techniques in Financial Valuation Problem Set Excel® Template
Save the Quantitative Techniques in Financial Valuation Problem Set Excel® Template to your computer.
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Complete the twelve exercises located in the template and record your answers in the highlighted spaces.
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Find the interest paid on a loan of $1,200 for three years at a simple interest rate of 5% per year. How much money will you pay after three years?
Find the maturity value of a loan of $1,750 for 28 months at 9.8% simple interest per year.
Find the simple interest rate of a loan of $5,000 that is made for three years and requires $1,762.50 in interest.
A loan of $16,840 is borrowed at 9% simple interest and is repaid with $4,167.90 interest. What is the duration of the loan?
How much money is borrowed if the interest rate is 9.25% simple interest and the loan is made for 3.5 years and has $904.88 interest?
Find the ordinary and exact interest for a loan of $1000 at a 5% annual interest rate. The loan was made on March 15 and is due May 15.
Find the bank discount and proceeds using ordinary interest for a loan to Michelle Anders for $7,200 at 8.25% annual simple interest from August 8 to November 8.
What is the effective interest rate of a simple discount note for $8,000, at an ordinary bank discount rate of 11%, for 120 days?
What is the effective interest rate for the ﬁrst year for a loan of $20,000 for three years if the interest is compounded quarterly at a rate of 12%?
Tim Bowling has $20,000 invested for three years at a 5.25% annual rate compounded daily. How much interest will he earn?
The Holiday Boutique would like to put away some of the holiday profits to save for a planned expansion. A total of $8,000 is needed in three years. How much money in a 5.2% three-year certificate of deposit that is compounded monthly must be invested now to have the $8,000 in three years?
Jamie Juarez needs $12,000 in 10 years for her daughter’s college education. How much must be invested today at 2% annual interest compounded semiannually to have the needed funds?