# QRB/501 » Assignment

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Grnfr

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Answer 12 question 1st assignment and 2nd assignment is the Signature assignment

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Kindly see attached the files corresponding to week five and CPI of week 6

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.
The instructor will then know where you made a mistake and provide you valuable feedback and partial credit (if appropria

back and 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

\$1.200
5%
3

Simple Interest (SI)
Maturity Value

\$180 =PRODUCT(B4:B6)
\$1.380 =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

\$1.750
10%
2,3 -- Please make sure that the time periods for Time and Rate match.

Simple Interest (SI)
Maturity Value

\$400 =PRODUCT(B3:B5)
\$2.150 =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

\$5.000
3,00
\$1.762,50
11,75%

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?
Principal
Rate
SI
Time

\$16.840
9,00%
\$4.167,00
2,75

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

\$904,88
9,25%
3,50
\$2.795,00

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
Principal
Rate
Time

3/15/2017
5/15/2017
61 days

=B5-B4

\$1.000
5,00%
0,17

Ordinary Simple Interest (SI)

Loan date
Loan Due Date
Exact time
Principal
Rate
Time

\$8,47
=PRODUCT(B8:B10)

3/15/2017
5/15/2017
61
\$1.000
5,00%
0,17

Exact Simple Interest (SI)

days

=G5-G4

\$8,36
=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
Face Value (F)
Discount Rate (D)
Time Period (T)
Bank Discount (B)
Proceeds (P)

8/8/2017
11/8/2017
92 days

=B5-B4

\$7.200
8,25%
0,25 years --> 'Convert Exact time in days to years
\$149,72 =PRODUCT(B8:B10) OR =B8*B9*B10
\$7.050,28 =B8-B11

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)
Proceeds (P)
Rate

\$8.000
11,00%
0,33 years --> 'Convert Exact time in days to years
\$289,32 =PRODUCT(B4:B6) OR =B4*B5*B6
\$7.710,68 =B4 - B7
11,4% =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; fo
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 ﬁrst y
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; fo
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% annual

No. of compounding
periods per year
EAR

1 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; fo
2,00% =EFFECT(B19, B20)

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; fo
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 are
What is the actual interest rate you pay on such a credit card?
Quoted Rate

18,00% monthly

No. of compounding
periods per year
EAR

12 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; fo
19,56% =EFFECT(B30, B31)

5. Find the effective interest rate for a loan of \$3,500 at 10% interest compounded quarterly.
Quoted Rate

10,00% 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; fo
10,38% =EFFECT(B36, B37)

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

C...

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