evapo a ae ee ee a a ee ee SONGEPTS EXAMPLES | 9.3 Calculate present value. How much money must be invested today to end Up with $8,000 in 3 years compounded semiannually at 1096? 10% + 2 = 5% per half year 2 periods per year; 3 years x 2 = 6 periods From Table 9-4, the value = 0.74621540 ‘Amount needed today = $8,000 x 0.74621540 $5,969.72 Critical Thinking _ Maria is interested in borrowing $2,500 from her bank. Would calculating ordinary or exact interest be more beneficial to her? Explain. What is the dollar amount written on a note called? . When the due date is given on a note, what must be computed before the interest charge can be computed? . You are interested in selling a note to your bank at a discount. What does it mean to “sell a note at a discount"? For the borrower or investor, is simple interest or compound interest more beneficial? PO eee) 429 Pete le)