## Description

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

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## Explanation & Answer

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.

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 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...