Ron Kenoly Inc. issued $600,000 of 9%, 10-year bonds on June 30, 2020, for$562,500. This price provided a yield of 10% on the bonds. Interest is payable semiannually on December 31 and June 30. If Kenoly uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2020.

Determine the interest rate to the nearest hundredth of a percent that will produce $2500, if$2000 is left at interest compounded semiannually for 8.5 yr.

Suppose that you have $9000 to invest. (a) If you invest it with the First National Bank at the nominal rate of 5% compounded quarterly, find the accumulated amount at the end of one year. (b) The First National Bank also offers certificates on which it pays 5.5% compounded continuously. However, a minimum investment of$10,000 is required. Because you have only $9000, the bank is willing to give you a 1-year loan for the extra$1000 that you need. Interest for this loan is at an effective rate of 8%, and both principal and interest are payable at the end of the year. Determine whether or not this strategy of investment is preferable to the strategy in part (a).

You are given a choice of taking the simple interest on $100,000 invested for 4 years at a rate of 5% or the interest on$100,000 invested for 4 years at an interest rate of 5% compounded daily. Which would you select? Explain your answer and give the difference in the two investments.

Which of the following one-year $\$ 1000$ bank loans offers the lowest effective annual rate?

a. A loan with an APR of $5.9 \%$, compounded monthly

b. A loan with an APR of $5.9 \%$, compounded annually, that also has a compensating balance requirement of $9.7 \%$ (on which no interest is paid)

c. A loan with an APR of $5.9 \%$, compounded annually, that has a $1.2 \%$ loan origination fee

In this exercise, use the add-on method of calculating interest to find the total interest and the monthly payment.

Reggie invests $12,000, part at 7% annual interest and part at 8.5% annual interest. How much is invested at each rate if Reggie’s total annual interest is$900?

An investor earned $\$ 208.76$ in interest in one year on an account that paid $4.25 \%$ simple interest.

How much more interest would the account have earned at a rate of $5.33 \%$ ?

Determine the interest rate, to the nearest hundredth of a percent, for $16,000 to grow$20,000 if invested for 7.25 yr and interest is compounded quarterly.

In this exercise, use the add-on method of calculating interest to find the total interest and the monthly payment.

Graph the simple interest earned on $950 at an annual rate of 4.2%.

Investigate the difference between compounding annually and simple interest. Round to the nearest cent. Find the interest for a 3-year CD for $5,000 at an interest rate of 2.5%, compounded annually.

Find the monthly interest rate $r$ when

$$A P R=11$$

The formula for continuously compounded interest is $A=P e^n$, where $A$ is the total amount, $P$ is the principal, $r$ is the annual interest rate, and $t$ is the time in years. To the nearest tenth, how many years would it take for the value of an investment to double at an annual interest rate of 6 percentage, compounded continuously?