Lesson 3 Apr 7 2010
Transcript of Lesson 3 Apr 7 2010
Owning or Leasing Your Dream Car
Is this for real?
Marge invested $2500 at 6.5% per annum compounded quarterly. Calculate the value of her investment after three years.
Calculate the effective interest rate.
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25006.5
44
0
12
3033.52
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25006.66016
11
0
3
3033.52
Credit Card InterestCalculate the effective interest rate of $1.00 invested at 18.5% compounded daily for one year.
HOMEWORK
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118.5
365365
0
365
1.203162
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120.31620
11
0
1
1.203162
Shaina wishes to invest $2000 given by her grandfather. She has an option of a guaranteed investment certificate earning 8.85%, compounded quarterly, or a savings bond of 9%, compounded semiannually.
Which investment should she choose?
If each investment term is 5 years, what will be the difference in their values at the end of the term?
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20008.85
44
0
4
2182.96
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20009
22
0
2
2184.05
$3105.94 $3098.21 = $7.73
Suppose an uncle has left you $100 000 to invest, on condition that you give onehalf of all interest earned to the SPCA. You decide to invest it in a savings account that pays 5% interest compounded quarterly. How much will you have given to the animal shelter after:
one month? 3 months?N=I%=PV=PMT=FV=P/Y=C/Y=PMT: END BEGIN
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10 years?2 months?
4 * (1/12)5 1000000
44
4 * (3/12)
4 * (2/12) 4 * (10)
0 1000005
0 1000005
0 1000005
44
44
44
Determine the monthly payment for a $8250.00 loan with an interest rate of 8.9% compounded monthly if the loan is repaid in two years (24 monthly payments). Also determine the total cost of repaying the loan, and the amount of interest paid.
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Mike bought a Chevy truck, and used his older Dodge truck as trade. The price of the Chevy was $22 500, and the tradein value of the Dodge was $3200. How much did Mike have to pay?
Note: PST (7%) and GST (5%) have to be paid on new car purchases. On used cars only PST is paid.
$22 500 * 0.12 = $2700
$2700 + $22 500 = $25 200
$25 200 $3 200 = $22 000
Joyce wants to buy a used Ford Mustang for $16 000 plus tax. She has $3 000 for a down payment and needs a loan to pay the rest. The bank charges 9% interest compounded monthly and the loan must be repaid in 3 years.
What is the loan principal?
How much are Joyce's monthly payments?
$16 000 * 0.12 = $1 920$1 920 + $16 000 = $17 920$17 920 $3 000 = $14 920
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Dave needs a new computer for university. The purchase price is $3294.00 before tax with a $0 down payment. Financing is available at 18.99%, compounded monthly. GST is 5% and PST is 7%.Calculate the monthly payment to purchase this computer over 48 months. What is the total amount paid for the computer?
What are the monthly payments and total paid if the computer is financed for 36 months?
What about 24 months?N=I%=PV=PMT=FV=P/Y=C/Y=PMT: END BEGIN
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HOMEWORK