1. Section 5.1, Pages 212 - 213 # 1 - 6, 11, 12, 14, 15, 18, 19, 21.
2. Section 5.2, Pages 216 - 217 # 1 - 4, 9 - 11, 14 - 18, 21, 22, 24.
3. It is estimated that a 2-week trip to Barbados four years from now will cost a total of $10,000.
Calculate to the nearest cent how much you should invest now at 4.5% A.P.R. so that you will have this $10,000 in four years if interest compounds:
(a) annually (b) quarterly (c) hourly (assume there are 365 days in a year).
4. Suppose you invest $P at an A.P.R. of a compounding k times annually.
(a) If the compound amount is $S, find a formula for t (the number of years) in terms of P, a, k and S that will make the above investment yield $S.
(b) Show mathematically that the "tripling time" (see Page 211, Example 6) does not depend on P or S.
5. Solve the effective rate equation (see Page 211, Equation (3)) for r in terms of re and n.
6. Let R > 0 be a constant. Suppose a principal of $200R has a future value of $1,000R at the end of 20 years. Assume the periodic interest rate throughout all of these 20 years is r% compounding monthly. Find the corresponding annual interest rate expressed as a percentage rounded to two decimals.
7. A debt of $9,000 is due 4 years from now. It's to be paid off by three payments: a first payment made 10 months from now, a second payment (that is double the first) 2 years from now, and a final payment (equal to half the first) made 3 years from now. Find to the nearest cent the value of each payment if an interest rate of 4.2% compounded monthly is assumed for all of the four years.