.494px;=”” block;=””>Instructions:
Week 5 Individual Assignment
Total Number of Questions – 12
Total Points: 6 1. You have twelve problems – on each tab of this Excel file.
2. Please show your work in the cells. Use Excel formulas instead of writing the values/answers directly in the cell.
The instructor will then know where you made a mistake and provide you valuable feedback and partial credit (if approp rectly in the cell.
nd partial credit (if appropriate). 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?
Principal
Rate
Time
Simple Interest (SI)
Maturity Value =PRODUCT(B4:B6)
=Principal + SI Find the maturity value of a loan of $1,750 for 28 months at 9.8% simple interest per year.
Principal
Rate
Time
Simple Interest (SI)
Maturity Value — Please make sure that the time periods for Time and Rate match.
=PRODUCT(B3:B5)
=Principal + SI Find the simple interest rate of a loan of $5,000 that is made for three years and requires $1,762.50 in interest.
Principal
Time
SI
Rate 0 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?
Principal
Rate
SI
Time 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?
SI
Rate
Time
Principal 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.
Loan date
Loan Due Date
Exact time days =B5-B4 Principal
Rate
Time Loan date
Loan Due Date
Exact time days Principal
Rate
Time Ordinary Simple Interest (SI) Exact Simple Interest (SI)
=PRODUCT(B8:B10) =PRODUCT(G8:G10) =G5-G4 =PRODUCT(G8:G10) 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.
Loan date
Loan Due Date
Exact time days Face Value (F)
Discount Rate (D)
Time Period (T)
Bank Discount (B) years –> ‘Convert Exact time in days to years
=PRODUCT(B8:B10) OR =B8*B9*B10 Proceeds (P) =B8-B11 =B5-B4 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?
Face Value (F)
Discount Rate (D)
Time Period (T)
Bank Discount (B) years –> ‘Convert Exact time in days to years
=PRODUCT(B4:B6) OR =B4*B5*B6 Proceeds (P) =B4 – B7 Rate =B7/PRODUCT(B9, B6) SOLVED EXAMPLE
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%?
Quoted Rate 12.00% quarterly No. of compounding
periods per year
EAR 4 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; f
12.55% =EFFECT(B5, B6) 1. Ross Land has a loan of $8,500 compounded quarterly for four years at 6%. What is the effective interest rate for the firs
Quoted Rate 6.00% quarterly No. of compounding
periods per year
EAR 4 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; f
6.14% =EFFECT(B11, B12) 2. Find the effective interest rate for the first year for a loan for four years compounded semiannually at an annual rate of 2
Quoted Rate 2.00% semiannually No. of compounding
periods per year
EAR 2 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; f
2.01% =EFFECT(B17, B18) 3. What is the effective interest rate for the first year for a loan of $5,000 at 10% compounded daily for three years?
Quoted Rate 10.00% Daily No. of compounding
periods per year
EAR 365 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; f
10.52% =EFFECT(B23, B24) 4. Depending on the issuer, a typical credit card agreement quotes an interest rate of 18 percent APR. Monthly payments a
What is the actual interest rate you pay on such a credit card?
Quoted Rate
No. of compounding
periods per year
EAR 18.00% For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; f
=EFFECT(B30, B31) 5. Find the effective interest rate for a loan of $3,500 at 10% interest compounded quarterly.
Quoted Rate
No. of compounding
periods per year
EAR For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; f
=EFFECT(B36, B37) y, type 1; for monthly, type 12; for daily, type 365 effective interest rate for the first year for the loan? y, type 1; for monthly, type 12; for daily, type 365 miannually at an annual rate of 2% y, type 1; for monthly, type 12; for daily, type 365 ded daily for three years? y, type 1; for monthly, type 12; for daily, type 365 ercent APR. Monthly payments are required. y, type 1; for monthly, type 12; for daily, type 365 y, type 1; for monthly, type 12; for daily, type 365 SOLVED EXAMPLE
Tim Bowling has $20,000 invested for three years at a 5.25% annual rate compounded daily.
How much interest will he earn?
Initial Investment (PV)
Quoted Rate
Compounding Frequency
Number of compoundings (m)
Quoted Rate divided by m = RATE
Number of Years
NPER (Num. of years * m)
Ending Amount (FV)
Compound Interest $20,000
5.25%
Daily
365
0.0144%
3
1095
$23,411.35
$3,411.35 Choose one
For Quarterly, type 4; for semiannually, type 2; for Exercise
Find the future value of a $15,000 money market investment at 2.8% annual interest compounded daily for three years.
Initial Investment (PV)
Quoted Rate
Compounding Frequency
Number of compoundings (m)
Quoted Rate divided by m = RATE
Number of Years
NPER (Num. of years * m)
Ending Amount (FV)
Compound Interest Choose one
For Quarterly, type 4; for semiannually, type 2; for ; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 nded daily for three years. ; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 SOLVED EXAMPLE
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?
Future Value Needed (FV)
Quoted Rate
Compounding Frequency
Number of compoundings (m)
Quoted Rate divided by m = RATE
Number of Years
NPER (Num. of years * m)
Amount Invested Now (PV) $8,000
5.2%
Monthly
12
0.4333%
3
36
$6,846.78 Choose one
For Quarterly, type 4; for semiannually, type 2; for Exercise
How much should be invested now to have $15,000 in six years if interest is 4% compounded quarterly?
Future Value Needed (FV)
Quoted Rate
Compounding Frequency
Number of compoundings (m)
Quoted Rate divided by m = RATE
Number of Years
NPER (Num. of years * m)
Amount Invested Now (PV) Choose one
For Quarterly, type 4; for semiannually, type 2; for or semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 or semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 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?
Future Value Needed (FV)
Quoted Rate
Compounding Frequency
Number of compoundings (m)
Quoted Rate divided by m = RATE
Number of Years
NPER (Num. of years * m)
Amount Invested Now (PV) Choose one
For Quarterly, type 4; for semiannually, type 2; for annually, t A loan of $8,000 for two acres of woodland is compounded quarterly at an annual
rate of 6% for five years. Find the compound amount and the compound interest.
Initial Investment (PV)
Quoted Rate
Compounding Frequency
Number of compoundings (m)
Quoted Rate divided by m = RATE
Number of Years
NPER (Num. of years * m)
Ending Amount (FV)
Compound Interest Choose one
For Quarterly, type 4; for semiannually, type 2; for annually, t nnually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 nnually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365

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