Question

1. [4 pts) Find the present value of an investment that is worth $19,513.75 after earning 3% simple interest for 2. [4 pts] Mr. Clopu buys an 18-month CD that pays 42% simple interest for $5,000. Find the value of the CD at the end of its term. 3. [4 pts) Find the maturation value of $2600 borrowed at 3.9% simple interest for 200 days. 4. The table below shows the activity on the credit card statement of Miss Pepper Mills for the month of April. She started the month with a balance of $342.57. Date Activity Location Amount 04/05 Payment Payment $200.00 04/15 Charge Gas $26.37 04/22 Charge Macy's $105.42 04/25 Charge Starbuck's $4.24 a. [4 pts]Find the average daily balance. b. [4 pts]If her card charges an 18.5% annual interest rate on her average daily balance, calculate Miss Pepper Mill's finance charge for the month of April.

Answer 1

Question 1

Present value = Future value / (1+ (rate per period*no. of periods))

= 19513.75/(1+(.03*5.5))

= 19513.75/(1+0.165)

= 19513.75/1.165

= $16750

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