# Simple Interest

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1 ACST603 Assessed coursework task 1 S2 2014
This is due before 6pm Friday 22 August 2014. You should send us 2 files, one of these in either word or pdf and one in excel format. We will provide submission instructions on iLearn. The formulae covered in topic 2 are set out below. The questions for topic 2 are set out below too. Your tasks are as follows:
Create a document in word or in pdf form answering the following questions
a) For each question in the quiz below, what is your numerical answer?
b) What formula or formulae did you use to solve the problem? (refer to the list of formulae below)
c) For each of the formulae you used in solving the problem, what parameter values (i.e. the inputs to the calculation) did you use to solve the problem?
Q1: How long will it take for \$20,000 to grow to \$30,000 at 8%p.a. simple interest? (in years correct to two decimal places)
Q2: Calculate the present value of \$10,000 due to be paid 3 years from now. The interest rate to use in the calculation is

i4  40%
Q3: Calculate the present value of \$10,000 due to be paid 3 years from now. The interest rate to use in the calculation is

i2  40%
Q4: If compound interest is charged at 2.0% per month, what is the effective annual rate of interest (as a percentage correct to two decimal places)?
Q5: How long (in years) does it take for money deposited in a bank account to accumulate to double the initial amount at the interest rate 16%.
Q6: \$10,000 is invested for 8 years. Calculate the future value if interest is at years. 6% for 3 years followed by

12% for 5

Q7: A 180‐days promissory note (this is similar to a bank bill) will mature for \$100,000 plus simple interest at 5%p.a. Calculate the maturity value of the note. (Correct the answer to 2 decimal places.)
Q8: Seventy days after the issue date, the original owner sold the note to Tiffany for

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