APOL 120 RESURRECTION APOLOGETIC Student Name APOL 120 Date Introduction Delete all highlighted material in this template and replace it with your original writing. Summary of the Minimalist Facts Argument Apologetic Conclusion Bibliography Instructions Instructions: Week 5 Individual Assignment Total Number of Questions - 12 Total Points: . 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 appropriate). Question 1 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 Simple Interest (SI) Maturity Value Question 2 Find the maturity value of a loan of $1,750 for 28 months at 9.8% simple interest per year.

Principal Rate Time -- Please make sure that the time periods for Time and Rate match. Simple Interest (SI) Maturity Value Question 3 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 Question 4 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 Question 5 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 Question 6 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 date Loan Due Date Loan Due Date Exact time days Exact time days Principal Principal Rate Rate Time Time Ordinary Simple Interest (SI) Exact Simple Interest (SI) Question 7 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 days Face Value (F) Discount Rate (D) Time Period (T) years --> 'Convert Exact time in days to years Bank Discount (B) Proceeds (P) Question 8 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) years --> 'Convert Exact time in days to years Bank Discount (B) Proceeds (P) Rate Question 9 SOLVED EXAMPLE What is the effective interest rate for the ï¬rst 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 4 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 EAR 12.55% 1. Ross Land has a loan of $8,500 compounded quarterly for four years at 6%. What is the effective interest rate for the ï¬rst year for the loan? Quoted Rate No. of compounding periods per year For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 EAR 2.

Find the effective interest rate for the ï¬rst year for a loan for four years compounded semiannually at an annual rate of 2% Quoted Rate No. of compounding periods per year For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 EAR 3. What is the effective interest rate for the ï¬rst year for a loan of $5,000 at 10% compounded daily for three years? Quoted Rate No. of compounding periods per year For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 EAR 4. Depending on the issuer, a typical credit card agreement quotes an interest rate of 18 percent APR. Monthly payments are required.

What is the actual interest rate you pay on such a credit card? Quoted Rate No. of compounding periods per year For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 EAR =EFFECT(B30, B. Find the effective interest rate for a loan of $3,500 at 10% interest compounded quarterly. Quoted Rate No. of compounding periods per year For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 EAR =EFFECT(B36, B37) Question 10 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) $20,000 Quoted Rate 5.25% Compounding Frequency Daily Choose one Number of compoundings (m) 365 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE 0.0144% Number of Years 3 NPER (Num. of years m) 1095 Ending Amount (FV) $23,411.35 Compound Interest $3,411.35 Exercise Find the future value of a $15,000 money market investment at 2.8% annual interest compounded daily for three years. 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 Question 11 SOLVED EXAMPLE The Holiday Boutique would like to put away some of the holiday profits to save for a planned expansion.

A total of $8,000 is needed in three years. How much money in a 5.2% three-year certificate of deposit that is compounded monthly must be invested now to have the $8,000 in three years? Future Value Needed (FV) $8,000 Quoted Rate 5.2% Compounding Frequency Monthly Choose one Number of compoundings (m) 12 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE 0.4333% Number of Years 3 NPER (Num. of years m) 36 Amount Invested Now (PV) $6,846.78 Exercise How much should be invested now to have $15,000 in six years if interest is 4% compounded quarterly? Future Value Needed (FV) Quoted Rate Compounding Frequency Number of compoundings (m) Quoted Rate divided by m = RATE Number of Years NPER (Num. of years m) Amount Invested Now (PV) Question 12 Jamie Juarez needs $12,000 in 10 years for her daughter’s college education.

How much must be invested today at 2% annual interest compounded semiannually to have the needed funds? Future Value Needed (FV) Quoted Rate Compounding Frequency Choose one Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE Number of Years NPER (Num. of years m) Amount Invested Now (PV) A loan of $8,000 for two acres of woodland is compounded quarterly at an annual rate of 6% for ï¬ve years. Find the compound amount and the compound interest. Initial Investment (PV) Quoted Rate Compounding Frequency Choose one Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE Number of Years NPER (Num. of years m) Ending Amount (FV) Compound Interest Question 1 Barry learned in an online investment course that he should start investing as soon as possible.

He had always thought that it would be smart to start investing after he finishes college and when his salary is high enough to pay the bills and to have money left over. He projects that will be 5–10 years from now. Barry wants to compare the difference between investing now and investing later. A financial advisor who spoke to Barry suggested that a Roth IRA (Individual Retirement Account) would be a good investment for him to start. 1.

If Barry purchases a $2,000 Roth IRA when he is 25 years old and expects to earn an average of 6% per year compounded annually over 35 years (until he is 60), how much will accumulate in the investment? Initial Investment (PV) Quoted Rate Compounding Frequency Choose one Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Ending Amount (FV) 2. If Barry doesn’t put the money in the IRA until he is 35 years old, how much money will accumulate in the account by the time he is 60 years old using the same return of 6%? How much less will he earn because he invested 10 years later?

Initial Investment (PV) Quoted Rate Compounding Frequency Choose one Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Ending Amount (FV) Difference in amount earned FV Part 1 minus FV Part . Barry knows that the interest rate is critical to the speed at which your investment grows. For instance, if $1 is invested at 2% compounded annually, it takes approximately 34.9 years to double. If $1 is invested at 5% compounded annually, it takes approximately 14.2 years to double. Determine how many years it takes $1 to double if invested at 10% compounded annually; at 12% compounded annually.

Hint: The easiest way to get the answer is to use the Rule of 72. Years to double the investment = 72 à· interest rate 4. At what interest rate would you need to invest to have your money double in 10 years if it is compounded annually? PV FV NPER RATE -- Use the RATE function in Excel. PV should be negative, FV should be positive.

PMT should be blank. Question 2 Abdol Akhim has just come from a Personal Finance class where he learned that he can determine how much his savings will be worth in the future. Abdol is completing his two-year business administration degree this semester and has been repairing computers in his spare time to pay for his tuition and books. Abdol got out his savings records and decided to apply what he had learned. He has a balance of $1,000 in a money market account at First Savings Bank, and he considers this to be an emergency fund.

His instructor says that he should have 3–6 months of his total bills in an emergency fund. His bills are currently $700 a month. He also has a checking account and a regular savings account at First Savings Bank, and he will shift some of his funds from those accounts into the emergency fund. One of Abdol’s future goals is to buy a house. He wants to start another account to save the $8,000 he needs for a down payment.

1. How much interest will Abdol receive on $1,000 in a 365-day year if he keeps it in the money market account earning 1.00% compounded daily? Initial Investment (PV) Quoted Rate Compounding Frequency Choose one Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Ending Amount (FV) Compound Interest 2. How much money must Abdol shift from his other accounts to his emergency fund to have four times his monthly bills in the account by the end of the year? Desired Emergency fund Current balance in money mkt.

Interest that Abdol will earn Balance to be transferred 3. Abdol realizes he needs to earn more interest than his current money market can provide. Using annual compounding on an account that pays 5.5% interest annually, find the amount Abdol needs to invest to have the $8,000 down payment for his house in 5 years. Future Value Needed (FV) Quoted Rate Compounding Frequency Choose one Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Amount Invested Now (PV) 4. Is 5.5% a realistic rate for Abdol to earn in a relatively short-term investment of 5 years, particularly at his bank?

Hint: For answering this question, explore how much interest do banks pay on short-term investments or CDs. Compare this number with 5.5% to see whether it is a realistic goal. If not, propose to Abdol what should he invest in instead. Question 3 At 45 years of age, Seth figured he wanted to work only 10 more years. Being a full-time landlord had a lot of advantages: cash flow, free time, being his own boss—but it was time to start thinking toward retirement.

The real estate investments that he had made over the last 15 years had paid off handsomely. After selling a duplex and paying the associated taxes, Seth had $350,000 in the bank and was debt-free. With only 10 years before retirement, Seth wanted to make solid financial decisions that would limit his risk exposure. Fortunately, he had located another property that seemed to meet his needs— a well maintained four-unit apartment. The price tag was $250,000, well within his range, and the apartment would require no remodeling.

Seth figured he could invest the other $100,000, and between the two hoped to have $1 million to retire on by age 55. 1. Seth read an article in the local newspaper stating the real estate in the area had appreciated by 5% per year over the last 30 years. Assuming the article is correct, what would the future value of the $250,000 apartment be in 10 years? Initial Investment (PV) Quoted Rate Compounding Frequency Choose one Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Ending Amount (FV) 2.

Seth’s current bank offers a 1-year certiï¬cate of deposit account paying 2% compounded semiannually. A competitor bank is also offering 2%, but compounded daily. If Seth invests the $100,000, how much more money will he have in the second bank after one year, due to the daily compounding? Current Bank Competitor Bank Semiannually Daily Initial Investment (PV) Quoted Rate Compounding Frequency Choose one Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Ending Amount (FV) Difference in FV =D36-C. After looking at the results from questions 1 and 2, Seth realizes that a 2% return in a certiï¬cate of deposit will never allow him to reach his goal of $1 million in 10 years.

Presuming his apartment will indeed be worth $400,000 in 10 years, compute the future value of Seth’s $100,000 investment using a 10%, 15%, and 20% return compounded semiannually for 10 years. Will any of these rates of return allow him to accomplish his goal of reaching $1 million? 10% 15% 20% Initial Investment (PV) Quoted Rate Compounding Frequency Semiannually Semiannually Semiannually Number of compoundings (m) Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Ending Amount (FV) Plus: Apartment Value $400,000 $400,000 $400,000 Total FV =FV + Apartment Value Which rate of return allows him to accomplish his goal of reaching $1 million? Choose one 4. A friend of Seth’s who is a real estate developer needs to borrow $80,000 to ï¬nish a development project.

He is desperate for cash and offers Seth 18%, compounded monthly, for 2.5 years. Find the future value of the loan. Initial Investment (PV) Quoted Rate Compounding Frequency Choose one Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365 Quoted Rate divided by m = RATE Number of Years NPER (Num. of years * m) Ending Amount (FV) 5. After purchasing the apartment, Seth receives a street, sewer, and gutter assessment for $12,500 due in 2 years. How much would he have to invest today in a CD paying 2%, compounded semiannually, to fully pay the assessment in 2 years?

Future Value Needed (FV) Quoted Rate Compounding Frequency Choose one Number of compoundings (m) For Quarterly, type 4; for semiann