1. Find the compound amount and the interest earned for the following: Amount: $980 Rate: 8%, compounded quarterly Time: 5 years
2. Find the interest earned if $2750 is deposited on June 12 and withdrawn on August 30. Assume 3.5% interest compounded daily.
3. Find the present value for the following: Amount needed: $20,000 Time: 10 years Rate: 5%, compounded semiannually
4. What is the effect of inflation on spendable income?
s. Application Problem: Describe a practical example where you do, or could, use the concepts of compound interest found in this chapter in your life.
Sample solution
Dante Alighieri played a critical role in the literature world through his poem Divine Comedy that was written in the 14th century. The poem contains Inferno, Purgatorio, and Paradiso. The Inferno is a description of the nine circles of torment that are found on the earth. It depicts the realms of the people that have gone against the spiritual values and who, instead, have chosen bestial appetite, violence, or fraud and malice. The nine circles of hell are limbo, lust, gluttony, greed and wrath. Others are heresy, violence, fraud, and treachery. The purpose of this paper is to examine the Dante’s Inferno in the perspective of its portrayal of God’s image and the justification of hell.
In this epic poem, God is portrayed as a super being guilty of multiple weaknesses including being egotistic, unjust, and hypocritical. Dante, in this poem, depicts God as being more human than divine by challenging God’s omnipotence. Additionally, the manner in which Dante describes Hell is in full contradiction to the morals of God as written in the Bible. When god arranges Hell to flatter Himself, He commits egotism, a sin that is common among human beings (Cheney, 2016). The weakness is depicted in Limbo and on the Gate of Hell where, for instance, God sends those who do not worship Him to Hell. This implies that failure to worship Him is a sin.
God is also depicted as lacking justice in His actions thus removing the godly image. The injustice is portrayed by the manner in which the sodomites and opportunists are treated. The opportunists are subjected to banner chasing in their lives after death followed by being stung by insects and maggots. They are known to having done neither good nor bad during their lifetimes and, therefore, justice could have demanded that they be granted a neutral punishment having lived a neutral life. The sodomites are also punished unfairly by God when Brunetto Lattini is condemned to hell despite being a good leader (Babor, T. F., McGovern, T., & Robaina, K. (2017). While he commited sodomy, God chooses to ignore all the other good deeds that Brunetto did.
Finally, God is also portrayed as being hypocritical in His actions, a sin that further diminishes His godliness and makes Him more human. A case in point is when God condemns the sin of egotism and goes ahead to commit it repeatedly. Proverbs 29:23 states that “arrogance will bring your downfall, but if you are humble, you will be respected.” When Slattery condemns Dante’s human state as being weak, doubtful, and limited, he is proving God’s hypocrisy because He is also human (Verdicchio, 2015). The actions of God in Hell as portrayed by Dante are inconsistent with the Biblical literature. Both Dante and God are prone to making mistakes, something common among human beings thus making God more human.
To wrap it up, Dante portrays God is more human since He commits the same sins that humans commit: egotism, hypocrisy, and injustice. Hell is justified as being a destination for victims of the mistakes committed by God. The Hell is presented as being a totally different place as compared to what is written about it in the Bible. As a result, reading through the text gives an image of God who is prone to the very mistakes common to humans thus ripping Him off His lofty status of divine and, instead, making Him a mere human. Whether or not Dante did it intentionally is subject to debate but one thing is clear in the poem: the misconstrued notion of God is revealed to future generations.
References
Babor, T. F., McGovern, T., & Robaina, K. (2017). Dante’s inferno: Seven deadly sins in scientific publishing and how to avoid them. Addiction Science: A Guide for the Perplexed, 267.
Cheney, L. D. G. (2016). Illustrations for Dante’s Inferno: A Comparative Study of Sandro Botticelli, Giovanni Stradano, and Federico Zuccaro. Cultural and Religious Studies, 4(8), 487.
Verdicchio, M. (2015). Irony and Desire in Dante’s” Inferno” 27. Italica, 285-297.
Sample Answer
Sample Answer
Title: Unraveling the World of Compound Interest: Calculations and Real-Life Applications
Compound Amount and Interest Earned:Amount: $980
Rate: 8%
Compounded Quarterly
Time: 5 years
To calculate the compound amount and interest earned, we can use the formula for compound interest:
[ A = P(1 + \frac{r}{n})^{nt} ]
Where:
A = Amount after t years
P = Principal amount ($980)
r = Annual interest rate (8% or 0.08)
n = Number of times interest is compounded per year (quarterly, so 4)
t = Time in years (5)
Plugging in the values:
[ A = 980(1 + \frac{0.08}{4})^{4*5} ]
[ A = 980(1 + 0.02)^{20} ]
[ A ≈ 980(1.02)^{20} ]
[ A ≈ 980 * 1.48594673 ]
[ A ≈ $1,456.03 ]
To find the interest earned:
Interest = Compound Amount – Principal
Interest = $1,456.03 – $980
Interest ≈ $476.03
Interest Earned on Deposit and Withdrawal:Deposit Amount: $2750
Interest Rate: 3.5%
Compounded Daily
Time: June 12 to August 30
To calculate the interest earned, we can use the formula for compound interest with the given dates in mind.
Present Value Calculation:Amount Needed: $20,000
Rate: 5%
Compounded Semiannually
Time: 10 years
To find the present value, we need to determine how much money needs to be invested now to reach $20,000 in 10 years with a semiannual compounding interest rate of 5%.
Effect of Inflation on Spendable Income:
Inflation erodes the purchasing power of money over time, meaning that the same amount of money will buy fewer goods and services as time goes on. This decrease in purchasing power reduces the spendable income of individuals, as they need more money to maintain the same standard of living.
Real-Life Application of Compound Interest:
One practical example where compound interest concepts come into play is in long-term savings or investments, such as retirement funds or college savings plans. By understanding how compound interest works, individuals can make informed decisions about where to invest their money to maximize growth over time. For instance, contributing regularly to a retirement account and taking advantage of compounding can help build a substantial nest egg for the future.
