Question 1

Using the table in handbook, the value of $60 deposited in a bank for six years at a rate of 10% compounded annually is:

Accepted Answer

A)  $96.63 
B)  $96.36 
C)  $106.30 
D)  $106.03 
E)  None of these 
A)  $96.63 
B)  $96.36 
C)  $106.30 
D)  $106.03 
E)  None of these

Question 2

Compound value = $ amount divided by table factor.

Accepted Answer

A) True 
 B)False

Question 3

Compounding always requires the use of tables.

Accepted Answer

A) True 
 B)False

Question 4

Sam Monte deposits $21,500 into Legal Bank, which pays 6% interest that is compounded semiannually. Using the table in the handbook, what will Sam have in his account at the end of six years?

Accepted Answer

A)  $29,760.30 
B)  $30,654.70 
C)  $30,456.07 
D)  $29,670.03 
E)  None of these 
A)  $29,760.30 
B)  $30,654.70 
C)  $30,456.07 
D)  $29,670.03 
E)  None of these

Question 5

Burton Bush wants to retire in Arizona when he is 80 years of age. Burton, who is now 55, believes he will need $400,000 to retire comfortably. To date, he has set aside no retirement money. If he gets an interest rate of 6% compounded annually, he will have to invest today (use the tables in the handbook):

Accepted Answer

A)  $92,300 
B)  $69,900 
C)  $96,500 
D)  $93,200 
E)  None of these 
A)  $92,300 
B)  $69,900 
C)  $96,500 
D)  $93,200 
E)  None of these

Question 6

The rate used in the table for calculating compound interest is found by:

Accepted Answer

A)  Annual rate × number of periods 
B)  Annual rate × number of times compounded per year 
C)  Annual rate divided by number of times compounded per year 
D)  Annual rate divided semiannually 
E)  None of these 
A)  Annual rate × number of periods 
B)  Annual rate × number of times compounded per year 
C)  Annual rate divided by number of times compounded per year 
D)  Annual rate divided semiannually 
E)  None of these

Using the table in handbook, the value of $60 deposited in a bank for six years at a rate of 10% compounded annually is:

Compound value = $ amount divided by table factor.

Compounding always requires the use of tables.

Sam Monte deposits $21,500 into Legal Bank, which pays 6% interest that is compounded semiannually. Using the table in the handbook, what will Sam have in his account at the end of six years?

The rate used in the table for calculating compound interest is found by:

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Annuities and Sinking Funds

Installment Buying

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Sales, Excise, and Property Taxes

Filters

Exam 12: Compound Interest and Present Value

Using the table in handbook, the value of $60 deposited in a bank for six years at a rate of 10% compounded annually is:

Compound value = $ amount divided by table factor.

Compounding always requires the use of tables.

Sam Monte deposits $21,500 into Legal Bank, which pays 6% interest that is compounded semiannually. Using the table in the handbook, what will Sam have in his account at the end of six years?

The rate used in the table for calculating compound interest is found by:

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Annuities and Sinking Funds

Installment Buying

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Sales, Excise, and Property Taxes

Filters