An organization invests $500,000 in an investment which is expected

| August 31, 2017

Question
1.An organization invests $500,000 in an investment which is expected to yield interest at a rate of 9 percent per year compounded semiannually. If the money is invested for 10 years, to what amount should it grow? How much interest will be earned during this period?

2.The compound amount factor (1 +i)n is the amount to which $1 would grow after periods if it earns compound interest ofi percent per period. Determine the compound amount and the interest earned if $1 is invested for 8 years at 12 percent per year (a) compounded semiannually, (b) compounded quarterly, and (c)compounded bi­monthly.

3.The number of students at a local university is currently 15,000. Enrollments have been growing at a rate of 3.5 percent per year. If enrollments continue at the same rate, what is the student population expected to be 10 years from now?

4.A sales representative for the college division of a large publisher had sales of 20,000 books this past year. Her sales have been increasing at the rate of 10 percent per year. If her sales continue to grow at this rate, how many books should she expect to sell 5 years from flow?

5.Consumer prices have been increasing at an average rate of 6 percent per year compounded quarterly. The base price on a particular model Chevrolet is $14,500. If prices on this model increase at the same rate as other consumer prices, what will the expected base price of this same model be 5 years from now?

6.If consumer prices are increasing at the rate of 6 percent per year compounded semian­nually, an item which costs $25 today will cost what amount in 10 years?

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