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1)You invest in a fund earning simple interest of 7%

Finance

1)You invest in a fund earning simple interest of 7%. The amount that you must invest today to have 5000 at the end of 5 years is X. The amount that you must invest at the end of 5 years to have 5000 at the end of 10 years is Y.

Determine |X − Y |.
(A) 0 (B) 267 (C) 289 (D) 301 (E) 327

2)You deposit 100 into a savings account at time 0, which pays interest at a nominal rate of i, compounded semiannually. Your friend deposits 200 into a different savings account at time 0, which pays simple interest at an annual rate of i.

You and your friend earn the same amount of interest during the last 6 months of the 10th year. Calculate i.

(A) 8% (B) 7.4% (C) 6.8% (D) 6% (E) 5.2%

3)You invest 25,000 in an account earning simple interest of 5%. Your friend investsX in an account earning 2% compounded annually. In year t, you and your friend earn the same annual effective interest rate. At the end of year t, the amount of money in your account is equal to the amount of money in your friend’s account. Determine X.

(A) 25,256 (B) 30,000 (C) 34,504 (D) 36,712 (E) 38,000

 

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