MAT 121: Mathematics for Business and Information Science OPTIONAL Take-Home "Quest" on Chapter 5: Mathematics of Finance 70 Points Total.

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1 Name: Section: Date: MAT 121: Mathematics for Business and Information Science OPTIONAL Take-Home "Quest" on Chapter 5: Mathematics of Finance 70 Points Total Guidelines 1. Each student must produce his or her own work for all exercises. This is NOT a group project. Failure to produce individual work will result in a grade of zero and possible additional sanctions. 2. Any acts of academic dishonesty will result in a grade of zero and possible additional sanctions. 3. All exercises are to be completed using only techniques discussed in class. 4. Although a graphing calculator may be used for a significant portion of the work necessary to complete each exercise, at least a minimal amount of work must be shown in order to receive full credit as follows (additional work should be shown as necessary): a. The formula(s) to be used, the value of each variable to be substituted into each formula, and the results of your calculations should be shown for each exercise along with key intermediate results where appropriate. b. For amortization tables and sinking fund schedules, all calculations for the first two rows of each table (not including Row 0) should be shown, but all subsequent rows may be completed without showing work. 5. All work is to be done in the space provided in this packet. If additional room is needed, you may staple additional sheets to the back of this packet as necessary, but please clearly indicate in the space provided for each such exercise that work is on the attached sheet(s) and submit your supplemental work in order of the exercises as presented in this packet. 6. No credit will be given for any exercise to which the submitted work is messy or illegible. 7. This cover page is to be the first page of your completed work when submitted. 8. Completed "quests" must be submitted no later than the beginning of class on the following date: Date Due: Monday, December 4, 2017 Late submissions will not be accepted for any reason and will not be graded. Grade: / 70

2 Directions: Complete each exercise using only techniques discussed in class. You must show all work and clearly indicate final answers to receive full credit How much money will be in an account earning 6 % annual interest compounded quarterly if the 8 account is not touched for 20 years after an initial deposit of $17,500 is made? (6 Points) 2. Assume the wildebeest population exhibits continuous growth at an annual rate of 2.3%. If that growth rate remains constant, determine the total expected number of wildebeests in a herd initially consisting of 4,817 wildebeests 9 years after that initial count was taken. (6 Points)

3 3. Complete the amortization table provided below for a $22,000 loan to be repaid in semiannual 1 installments over a term of five years if the loan carries an annual interest rate of 4 %. 4 (10 Points) Payment Number Amount of Payment Contribution to Principal Contribution to Interest Remaining Principal 0 $ 22,

4 4. Determine the total amount of money in an account into which $800 is deposited on the last day of each quarter for 30 years if the account earns 5% annual interest compounded quarterly. 5. What is the annual percentage yield of an investment with an annual percentage rate of 27.99% compounded monthly? (6 Points) 6. How much money must be deposited into an investment earning 12% annual interest compounded semiannually in order to end up with $34, after 10 years if no additional transactions take place on the account during that time?

5 7. A woman begins investing in an ordinary annuity at the same time a man opens a savings account. Both investments earn 6% annual interest compounded quarterly. The woman deposits $500 into her annuity at the end of each quarter, and the man makes no further transactions on his savings account after his initial deposit. How much must the man deposit so that they both have the same total amount in their respective investments after a term of 10 years? 8. If $5,000 is deposited into a savings account on January 1, 2018, and no further transactions are made on the account, determine the year in which the account will have a balance of $100,000 if the account earns a fixed annual interest rate of 7% compounded quarterly.

6 9. Complete the sinking fund schedule provided below for the accumulation of $50,000 through annual contributions over a term of eight years if the loan carries an annual interest rate of 9%. (10 Points) Deposit Number Amount of Contribution Interest Earned Total Deposit Accumulated Total 0 $