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Mathematics Clinic => Grade 11 and 12 Mathematics => Topic started by: sc00by25 on Jun 6, 2019

Title: Determine the compound discount on $18 875 due in 7.75 years if interest is 9.72% compounded monthly.
Post by: sc00by25 on Jun 6, 2019

Question 1

A $17 200 debt will accumulate for six years at 11.6% compounded semi-annually. For how much will the debt sell four years after it was incurred if the buyer of the debt charges 9% compounded quarterly?

Question 2

Determine the compound discount on $18 875 due in 7.75 years if interest is 9.72% compounded monthly.

Title: Determine the compound discount on $18 875 due in 7.75 years if interest is 9.72% compounded monthly.
Post by: qytan on Jun 6, 2019

Answer 1

Maturity value: PV = 17200.00; i = 11.6%/2 = 5.8%; n = 12
FV = 17200.00(1.058)12 = 17200.00(1.9671071) = $33 834.24

Proceeds:

i = 0.09/4 = 0.0225 N = 2 × 4 = 8

PV = 33834.24(1.0225)-8 = 33834.24(.8369383) = $28 317.17

Answer 2

PV = 18875.00(1.0081)-93 = 18875.00(4722412) = $8913.55
Compound discount = 18875.00 - 8913.55 = $9961.45

Title: Determine the compound discount on $18 875 due in 7.75 years if interest is 9.72% compounded monthly.
Post by: sc00by25 on Jun 6, 2019

Excellent

Title: Determine the compound discount on $18 875 due in 7.75 years if interest is 9.72% compounded monthly.
Post by: qytan on Jun 6, 2019

Great! Please up vote :D

Title: Re: Determine the compound discount on $18 875 due in 7.75 years if interest is 9.72% compounded mon
Post by: priya Choudhary on Oct 31, 2020

Thank you

Title: Re: Determine the compound discount on $18 875 due in 7.75 years if interest is 9.72% compounded mon
Post by: Rajkanwer Singh on Jul 27, 2021

thank  you