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BUQU 1130 – Business Mathematics
Ensure student name and number appear on the top of this question sheet.
For each question, you must write down the inputs. You can copy/paste the following set
Make sure you mention what you are computing.
All your answers must be shown in the space provided along the right side. Show your work
in the space below the question.
All answers must:
o Show appropriate units
o Keep everything in nine decimals, with only final answers rounded.
o Show the appropriate number of decimal places (percentages should be shown with two
decimal places as in 12.25%, money as dollars and cents as in $6.94)
Keep your rough works. I may ask random students to send their work/timelines to me.
KPU Code of honesty applies to this exam. I trust you to adhere to it, even in the strange
circumstances we are finding ourselves in.
You borrowed $10000.00 two years ago at 10.56% p.a. compounded monthly and scheduled to pay
$2000.00 three years from now and $5500.00 six years from now. How much will you owe ten years
Answer the following independent/unrelated questions:
a) To save $16,500.00 in six years by making payment of $500.00 at the end of every quarter for six
years, what nominal rate of interest (compounded monthly) would you require?
For the last ten years Joe has made deposits of $285.00 at the end of every six months
earning interest at 5.7% compounded annually. He leaves the accumulated balance for
another ten years at 7% compounded quarterly.
a) What will the balance be in Joe's account at the end of the second ten-year period?
b) How much did Joe contribute?
c) How much will be interest?
A sum of money is deposited at the end of every month for 15 years at 6.5% compounded
quarterly. After the last deposit, interest for the account is to be 4% compounded monthly and
the account is to be paid out by end-of-quarter payments of $4800 over six years.
a) How much should there be in the account right before the withdrawals of $4800 begin?
b) Based on your answer in (a), what is the size of monthly deposit?
Mohammad wants to buy a new car. He wants to save $6000 for down payment and finance the rest
of the price.
a) If he can put aside $300 per month for the down payment in an account paying 6.2% compounded
annually, how long will it take him to save $6000? Give your answer in years and months.
b) After saving $6000, Mohammad goes to a dealer to buy the car he wants. He ends up signing a
contract the requires him paying $320 per month for the next four years at 3.99% compounded
monthly. What is the cash price of the car he bought?
Consider a six-year $8500 promissory note with 6.4% interest rate, compounded monthly.:
a) What is the maturity value of the note?
b) What are the proceeds the note, seven months before maturity if the market rate is 6%