Covers Lessons 1–5: simple and compound interest, effective annual rate, depreciation, and geometric sequences in finance.
Its question set has not been written, so there is nothing here to attempt. Nothing you have done is lost, and the lessons either side of it are unaffected.
To test yourself on this material now, use the module quiz, which covers the same content.
Q1: B, $A = P(1+r)^n$ is compound interest.
Q2: C, $I = 12{,}000 \times 0.045 \times 3 = \$1{,}620$.
Q3: B, Monthly rate = $6\% / 12 = 0.5\%$.
Q4: C, $r_{\text{eff}} = (1 + 0.08/4)^4 - 1 = 8.24\%$.
Q5: A, Flat rate: $S = 30{,}000 - 6{,}000 \times 4 = \$6{,}000$.
Q6: D, Daily compounding always produces the highest EAR for a given nominal rate.
Q7: B, $n = \ln(2)/\ln(1.06) = 11.9$ years.
Q8: C, Common ratio is $(1+i) = 1.05$.
Q9 (3 marks): $P = 25{,}000 / (1.048)^5 = \$19{,}768.25$ [2]. They must deposit $\$19{,}768.25$ today [1].
Q10 (3 marks): (a) $S = 45{,}000(0.85)^5 = \$19{,}978.22$ [2]. (b) Total depreciation = $45{,}000 - 19{,}978.22 = \$25{,}021.78$ [1].
Q11 (4 marks): (a) Product A: $(1 + 0.058/2)^2 - 1 = 5.88\%$ [1]. Product B: $(1 + 0.057/12)^{12} - 1 = 5.85\%$ [1]. (b) Product A is better despite the lower nominal rate because its EAR is higher [1]. This demonstrates why consumers must compare EAR, not nominal rates [1].