18 Jan

Annual effective rate of interest of i, an investment of 166 today

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Question: 1. at an annual effective rate of interest of i, a…

  1. At an annual effective rate of interest of i, an investment of 166 today and 105 at the end of one year will accumulate to 291 at the end of the second year. Calculate i? (A) 4.0% (B) 4.5% (C) 5.0% (D) 5.5% (E) 6.0%
  2. Find the amount that must be invested now at an annual rate of simple discount of 5% in order to
    accumulate to $500 at the end of 4 years.
    (A) $400 (B) $407 (C) $411 (D) $417 (E) $421

 

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