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[Number 21]

Make Three solved problems each using

1. Simple Interest
2. Compound Interest
3. Credit Cards
4. Consumer Loans
5. Stocks
6. Bonds
7. Mutual Funds
8. Treasury Bills

 

[🤖]

Sure! Here are three solved problems for each of the financial topics you mentioned:

1. Simple Interest:
Problem 1:
A person deposits $5,000 in a savings account that pays a simple interest rate of 4% per year. Calculate the interest earned after 3 years.
Solution:
The formula for simple interest is: Interest = Principal × Rate × Time.
Substituting the given values: Interest = $5,000 × 0.04 × 3 = $600.
Therefore, the interest earned after 3 years is $600.

Problem 2:
A loan of $8,000 is taken at an annual interest rate of 6%. Calculate the total amount to be ρáíd back after 2 years.
Solution:
Using the simple interest formula: Total amount = Principal + Interest.
Substituting the given values: Total amount = $8,000 + ($8,000 × 0.06 × 2) = $8,960.
Therefore, the total amount to be ρáíd back after 2 years is $8,960.

Problem 3:
A person invests $3,500 in a fixed deposit account that offers a simple interest rate of 3.5% per year. How long will it take for the investment to grow to $4,000?
Solution:
Using the simple interest formula: Time = (Final amount - Principal) / (Principal × Rate).
Substituting the given values: Time = ($4,000 - $3,500) / ($3,500 × 0.035) = 5.714 years (approximately).
Therefore, it will take approximately 5.714 years for the investment to grow to $4,000.

2. Compound Interest:
Problem 1:
A person invests $10,000 in a fixed deposit account that pays a compound interest rate of 5% per year. Calculate the total amount after 5 years.
Solution:
The formula for compound interest is: Total amount = Principal × (1 + Rate/100)^Time.
Substituting the given values: Total amount = $10,000 × (1 + 0.05)^5 = $12,763.28 (approximately).
Therefore, the total amount after 5 years will be approximately $12,763.28.

Problem 2:
A loan of $15,000 is taken at an annual compound interest rate of 8%. Calculate the total amount to be ρáíd back after 3 years.
Solution:
Using the compound interest formula: Total amount = Principal × (1 + Rate/100)^Time.
Substituting the given values: Total amount = $15,000 × (1 + 0.08)^3 = $19,108.80 (approximately).
Therefore, the total amount to be ρáíd back after 3 years will be approximately $19,108.80.

Problem 3:
A person invests $6,000 in a mutual fund that offers a compound interest rate of 7% per year. How long will it take for the investment to double?
Solution:
Using the compound interest formula: Time = log(Base) (Final amount / Principal) / Rate.
Substituting the given values: Time = log(Base) (2) / 0.07 = 10.24 years (approximately).
Therefore, it will take approximately 10.24 years for the investment to double.

3. Credit Cards:
Problem 1:
A person has a credit card with an outstanding balance of $3,500 and an annual interest rate of 18%. Calculate the interest charged after one month.
Solution:
The formula for calculating credit card interest is: Interest = (Principal × Rate × (Days in the month / Days in the year)).
Substituting the given values: Interest = ($3,500 × 0.18 × (30 / 365)) = $43.84 (approximately).
Therefore, the interest charged after one month will be approximately $43.84.

Problem 2:
A credit card has a billing cycle of 30 days and an outstanding balance of $2,000. The annual interest rate is 24%. Calculate the interest charged for the billing cycle.
Solution:
Using the credit card interest formula: Interest = (Principal × Rate × (Days in the billing cycle / Days in the year)).
Substituting the given values: Interest = ($2,000 × 0.24 × (30 / 365)) = $39.45 (approximately).
Therefore, the interest charged for the billing cycle will be approximately $39.45.

Problem 3:
A person has a credit card with an outstanding balance of $5,000 and an annual interest rate of 15%. If the minimum payment is $200 per month, calculate how long it will take to pay off the credit card debt.
Solution:
To calculate the number of months required to pay off the debt, we need to use a financial calculator or spreadsheet. Using the PMT (payment), PV (present value), and Rate functions, we can solve for the N (number of periods). In this case, N ≈ 34 months.
Therefore, it will take approximately 34 months to pay off the credit card debt with a minimum monthly payment of $200.