Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
a. If N250,000 is invested in an account that earns 4% per year compound interest, what is the:
i. value of the investment after 5 years? (3 Marks)
ii. total interest earned? (2 Marks)
b. When it was apparent that your parents could not afford to finance your university education, you sought and obtained a 4-year loan of N250,000.00 from Education Bank Limited. The bank imposed a simple interest rate of 7½%.
i. How much do you need to pay off the bank now
(4 years after) that you are through with your study?
(7 Marks)
ii. If you decide to be paying N25,000 every month from now and the bank agreed to reduce the interest rate to 1% per month on the unpaid balance at the beginning of the month, how much additional total interest will be paid? (8 Marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
A barber invests N100,000 for 5 years. At the end of the investment period, he receives a cash transfer of N120,600 as final settlement of the investment.
Required:
Use logarithm (to base 10) to determine the compound interest rate on the investment.
Find Related Questions by Tags, levels, etc.
Nike Kenny is a student of a state-owned polytechnic in Yobe. She planned to save N5,000 each year out of the emolument she collects from the work-study club of a school. How much will she have at the end of the tenth year if interest on her savings is 6% compounded semi-annually?
Find Related Questions by Tags, levels, etc.
Larry wishes to save money towards his new-born daughter’s wedding. He intends to save ₦50,000 on the first day of every 6 months for 18 years, starting immediately. The account pays interest of 6% compounded semi-annually. What will be the balance on the account at the end of 18 years?
A. ₦3,258,748.33
B. ₦4,368,748.34
C. ₦5,278,748.33
D. ₦6,588,748.33
E. ₦6,788,748.33
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Suppose Bonde invested N240,000 in a savings account that paid interest twice in a year. After 8 years, the money had accumulated to N380,980. What was the annual compound interest rate?
A. 3.64%
B. 4.75%
C. 5.86%
D. 6.65%
E. 6.76%
Find Related Questions by Tags, levels, etc.
Suppose N1 million is deposited in a money deposit bank that is paying 7.5% interest per annum compounded annually. What will be the compound amount at the end of the third year?
A. N1,242,300
B. N1,243,400
C. N1,344,500
D. N1,345,600
E. N1,446,700
Find Related Questions by Tags, levels, etc.
You recently won ₦50 million from the popular NTA show “Who wants to be a billionaire?” A financial expert counselled that you invest the money in a bank at 6% interest rate per annum. How much will you have at the end of ten years?
A. N88,550,000
B. N89,550,000
C. N90,550,000
D. N91,550,000
E. N92,550,000
Find Related Questions by Tags, levels, etc.
A savings scheme involves investing ₦300,000 per annum on the last day of the year. If the interest rate is 6.5%, what is the sum to be received at the end of 9 years?
A. ₦3,419,591.31
B. ₦3,519,692.31
C. ₦3,619,793.31
D. ₦3,659,894.31
E. ₦3,719,894.31
Find Related Questions by Tags, levels, etc.
Fattie Limited wishes to make some savings to replace an existing machine with a better model at a cost of ₦10,000,000 in 7 years’ time. Assuming that the current rate of interest is 9% per annum, what fixed annual amount must the company set aside at the end of each year to achieve its target?
A. ₦1,053,926.50
B. ₦1,064,956.50
C. ₦1,075,926.52
D. ₦1,086,956.52
E. ₦1,093,926.50
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
A loan of GH¢3,000 at an effective annual interest rate of i = 12% is amortized by means of 12 annual payments, beginning a year after the loan is taken.
Hint: The schedule should have the following columns: Payment, Interest Due, Principal Repaid, and Outstanding Balance.
Required:
Construct an amortization schedule.
Find Related Questions by Tags, levels, etc.
Alpha Transport Company buys a vehicle for GH¢265,000. The value of the vehicle depreciates on a reducing balance basis at 17% per annum. The company plans to replace this vehicle in 5 years’ time, and they expect the price of a new vehicle to increase annually by 12%.
Required:
i) Calculate the book value of the vehicle in five years’ time. (3 marks)
ii) Determine the amount of money needed in the sinking fund for the company to be able to afford a new vehicle in five years’ time. (3 marks)
iii) Calculate the required monthly deposits if the sinking fund earns an interest rate of 11% per annum compounded monthly. (3 marks)
Find Related Questions by Tags, levels, etc.
Every Monday, Kwei puts GH¢30 into a savings account at the Ring Bank, which accrues interest of 6.92% per annum compounded weekly.
Required:
i) Draw a cash flow timeline showing the payments, the interest rate, and the present values for the first four payments. (3 marks)
ii) Determine how long it will take Kwei’s account to reach a balance of GH¢4,397.53. Convert your answer into the number of years and days to the nearest integer. (6 marks)
iii) Determine how much interest Kwei will receive from the bank during the period of his investment.
Find Related Questions by Tags, levels, etc.
The Asogli Company Ltd has been offered the following alternative terms for a one-year loan to be repayable plus the interest in full at the end of the year:
i) 2.5% per month compounded monthly
ii) 10% per six months compounded six-monthly.
Required:
Calculate, for each alternative, the annual percentage rate of interest. Recommend one of the alternatives and explain why.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Elevate your professional expertise across key business domains with our comprehensive training programs
Follow us on our social media and get daily updates.
This feature is only available in selected plans.
Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.
If you’re not subscribed to a plan, click on the button below to choose a plan