AS/MATH2580 A Assignment AS/MATH2580 A Assignment #1
Due Wednesday, October 11, 2000

Let K be the number made from the last (rightmost) two digits of your student number. For example, if your student number is 202167603 then your K = 03 = 3 (three). Or if your student number is 201087581 then your K = 81 (eighty one). Use K as indicated in the questions below.

Make sure your name and student number are on your submitted assignment. Show your work on each question. You may use (at your option) a spreadsheet or other computer program to do #2. If so, include a computer printout of your work.

Your answer to each question should be in sentence form.

  1. An invoice for $14,542 has terms 5/5, n/(20+K). Find the maximum simple interest rate at which the buyer can take advantage of the discount. (Express your answer as a percent to 4 decimals, e.g. 1.2345%)

  2. A demand loan of $10,000 is made on April 6, 2000 at 8.5% simple interest per year. After (10+K) days, a payment of $3,000 is made. On August 6, 2000, the interest rate changes to 9.5%. On October 9, 2000, a payment of $1000 is made. On December 20, 2000 the balance of the loan is paid with a final payment. Find the final payment and find the total interest paid on the loan.

  3. A promissory note for $4,000 is signed on April 3, 2000. It bears interest at 15% per year and is due on November 15, 2000. The note is sold to a finance company (10+K) days after it was signed and the company discounts the note at a rate of 18% simple interest per year. How much does the company pay for the note? (In this question, you should include the customary 3 days of grace.)

  4. A loan of $9,500 is made at 10% annual simple interest. Three equal partial payments of $(2000+K) are made at the end of 6 weeks, 8 weeks, and 10 weeks. The balance is repaid at the end of 12 weeks. Assuming the Merchants' Rule is used, what is that balance?

  5. Do the previous question again but use the Declining Balance Method.

  6. In #3 above, assume the finance company discounted at a discount rate of 19%. What would the company pay?

  7. If the nominal annual interest rate is (4 + 0.1K)% compounded quarterly, find (a) the effective annual rate and (b) the equivalent nominal annual rate compounded daily. (Express your answers as percents to 4 decimals, e.g. 1.2345%)

  8. A loan of $10,000 is to be repaid in full with interest at the end of (48+K) months. Find the amount of interest paid if (a) 8% simple interest per year is charged and (b) if the interest rate is j12 = 8%.

  9. Suppose j2 = x and the equivalent annual effective rate is x+0.0064. Find x.

  10. On August 15, 2000, Ally deposited $5000 into an account that earns interest at j12 = 7%, payable into her account on the first of each month. On what date will she first be able to withdraw $10,000? (Assume that simple interest is used for fractions of a month.)


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On 25 Sep 2000, 16:42.