Work the following applied problem.

Which of these 20-year zero-coupon bonds will be worth more at maturity: one that sells for $4510, with a 6.1% interest rate, or one that sells for$5809, with a 4.8% interest rate?

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?

Investigate the difference between compounding annually and simple interest. Round to the nearest cent. Find the interest for a 6-year CD for $5,000 at an interest rate of 2%, compounded annually.

The bank offered a 0.6% interest rate. Find 0.6% of $1300.

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.

What happens to the present value of an annuity as the interest rate increases?

To make CDs look more attractive than they really are, some banks advertise that their rates are higher than their competitors’ rates; however, the fine print says that the rate is a simple interest rate. If a person deposits $10,000 at 10% per year simple interest, what compound interest rate would yield the same amount of money in 3 years?

On May 15, Criqui Outback Clothiers borrowed some money on a 4-month note to provide cash during the slow season of the year. The interest rate on the note was 8%. At the time the note was due, the amount of interest owed was $480.

Instructions

(b) Assume the amount borrowed was$18,500. What was the interest rate if the amount of interest owed was $555?

Suppose that $10,000 is invested at continuous rate r and grows to$17,160 in 9 years. Find the interest rate r.

A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market rate of 7%. Interest is paid annually. What is the amount of interest the bondholders will receive at the end of the year?

Find the time required for a $1000 investment to (a) double at interest rate r, compounded continuously, and (b) triple at interest rate r, compounded continuously. Round your results to two decimal places.$r = 7 %$

The formula

$$I_t=\frac{I_f}{1-T}$$

gives the taxable interest rate $I_t$ equivalent to the tax-free interest rate $I_f$ for a person in the $(100 \cdot T) \%$ tax bracket. Solve for $T$.

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

Find the time required for a $1000 investment to (a) double at interest rate r, compounded continuously, and (b) triple at interest rate r, compounded continuously. Round your results to two decimal places.$r = 3.75%$