Question 1

What is the annual percentage yield (or effective annual rate) for a nominal rate of 12% compounded continuously? Round your answer to two decimal places. ​

Accepted Answer

A) 16.18% 
B) 12.75% 
C) 11.53% 
D) 14.26% 
E) 18.70% 
A) 16.18% 
B) 12.75% 
C) 11.53% 
D) 14.26% 
E) 18.70%

Question 2

What is the present value of an investment at 15% annual simple interest if it is worth $924.50 in 6 months? Round your answer to the nearest cent. ​

Accepted Answer

A) $860.00 
B) $870.00 
C) $850.00 
D) $914.50 
E) $934.50 
A) $860.00 
B) $870.00 
C) $850.00 
D) $914.50 
E) $934.50

Question 3

If you lend $3,500 to a friend for 19 months at 8% annual simple interest, find the future value of loan. Round your answer to the nearest cent. ​

Accepted Answer

A) $4,386.67 
B) $8,820.00 
C) $3,998.75 
D) $3,943.33 
E) $3,887.92 
A) $4,386.67 
B) $8,820.00 
C) $3,998.75 
D) $3,943.33 
E) $3,887.92

Question 4

A recent college graduate begins a savings plan at age 27 by investing $600 at the end of each month in an account that earns an annual rate of 7.3%, compounded monthly. If this plan is followed for 10 years, how much should the monthly contributions be for the next 28 years in order to be able to withdraw $10,000 at the end of each month from the account for the next 25 years? Round your answer to the nearest cent. ​

Accepted Answer

A) $796.22 
B) $516.96 
C) $2,189.51 
D) $214.45 
E) $86.41 
A) $796.22 
B) $516.96 
C) $2,189.51 
D) $214.45 
E) $86.41

Question 5

Given 10 and 30 year loans with the same interest rate, the 30 year loan results in a lower periodic payment.

Accepted Answer

A) True 
B) False 
A) True 
B) False

Question 6

A student has a savings account earning 9% simple interest. She must pay $1,900 for first-semester tuition by September 1 and $1,900 for second-semester tuition by January 1. How much must she earn in the summer (by September 1) in order to pay the first-semester bill on time and still have the remainder of her summer earnings grow to $1,900 between September 1 and January 1? Round your answer to two decimal places. ​

Accepted Answer

A) $3,771.92 
B) $3,758.19 
C) $3,744.66 
D) $3,718.18 
E) $3,775.88 
A) $3,771.92 
B) $3,758.19 
C) $3,744.66 
D) $3,718.18 
E) $3,775.88

Question 7

A sinking fund is established to discharge a debt of $80,000 in 11 years. If deposits are made at the end of each 6-month period and interest is paid at the annual rate of 6%, compounded semiannually, what is the amount of each deposit? Round your answer to the nearest cent. ​

Accepted Answer

A) $823.02 
B) $1,252.54 
C) $2,619.79 
D) $612.85 
E) $405.67 
A) $823.02 
B) $1,252.54 
C) $2,619.79 
D) $612.85 
E) $405.67

Question 8

How much is needed in an account that earns an annual rate of 8.4% compounded monthly in order to withdraw $1,200 at the end of each month for 22 years? Round your answer to the nearest cent. ​

Accepted Answer

A) $103,164.36 
B) $156,715.29 
C) $151,429.66 
D) $144,245.22 
E) $134,479.83 
A) $103,164.36 
B) $156,715.29 
C) $151,429.66 
D) $144,245.22 
E) $134,479.83

Question 9

A debt of $100,000 is amortized at 6%, compounded monthly, over 25 years with 300 monthly payments of $644.30 each. The figure below includes two graphs: one shows the total amount paid (in monthly payments) as a function of time (in months), and the other shows the amount paid toward the principal of the debt as a function of time. ​   ​
Which of the answers represents how much interest will be paid on the debt after 150 months?
​

Accepted Answer

A)   
, where A is the area between the two curves. 
B) The area between the two curves. 
C) The length of the vertical line segment from the lower curve to the upper curve at  
) 
D) The length of the upper graph from the origin to the point with x-coordinate 150. 
E) The area below the lower curve. 
A)   
, where A is the area between the two curves. 
B) The area between the two curves. 
C) The length of the vertical line segment from the lower curve to the upper curve at  
) 
D) The length of the upper graph from the origin to the point with x-coordinate 150. 
E) The area below the lower curve.

Question 10

A developer wants to buy a certain parcel of land. The developer feels she can afford payments of $26,000 each half-year for the next 6 years. How much can she borrow and hold to this budget at an annual rate of 7.2% compounded semianually? Round your answer to the nearest cent. ​

Accepted Answer

A) $413,166.55 
B) $249,774.48 
C) $558,705.90 
D) $615,256.64 
E) $138,088.45 
A) $413,166.55 
B) $249,774.48 
C) $558,705.90 
D) $615,256.64 
E) $138,088.45

Question 11

Which of the following expresses the sum of the first 29 terms of the geometric sequence   ....? ​

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 12

The following figure shows a graph that compares the present values of two ordinary annuities of $800 quarterly as functions of the number of quarters. One annuity is at an annual rate of 6% compounded quarterly, and the other is at an annual rate of 9% compounded quarterly. Use the graph below to estimate the difference between the present values of these annuities for 25 years (100 quarters). ​   ​

Accepted Answer

A) $32,000 
B) $4,500 
C) $30,000 
D) $100 
E) $9,586 
A) $32,000 
B) $4,500 
C) $30,000 
D) $100 
E) $9,586

Question 13

What is the size of the payments that must be deposited at the beginning of each 6-month period in an account that pays an annual rate of 8%, compounded semiannually, so that the account will have a future value of $110,000 at the end of 11 years? Round your answer to the nearest cent. ​

Accepted Answer

A) $17,573.48 
B) $7,842.69 
C) $916.44 
D) $3,088.34 
E) $1,597.49 
A) $17,573.48 
B) $7,842.69 
C) $916.44 
D) $3,088.34 
E) $1,597.49

Question 14

Suppose an individual wants to have $190,000 available for her child's education. Find the amount that would have to be invested at annual rate 10%, compounded continuously, if the number of years until college is 17 years. Round your answer to the nearest cent.

Accepted Answer

A) $28,735.55 
B) $22,692.26 
C) $34,709.87 
D) $16,750.91 
E) $46,079.00 
A) $28,735.55 
B) $22,692.26 
C) $34,709.87 
D) $16,750.91 
E) $46,079.00

Question 15

A property owner has several rental units and wants to build more. How much of each month's rental income should be deposited at the beginning of each month in an account that earns an annual rate of 6.8%, compounded monthly, if the goal is to have $150,000 at the end of 7 years? Round your answer to the nearest cent.

Accepted Answer

A) $3,155.45 
B) $1,391.38 
C) $1,742.00 
D) $2,270.66 
E) $1,142.50 
A) $3,155.45 
B) $1,391.38 
C) $1,742.00 
D) $2,270.66 
E) $1,142.50

Question 16

Write an expression that gives the requested term or sum. ​
The sum of the first 12 terms of the geometric sequence with first term 6 and common ratio 7.
​

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 17

A new firm loses $1,600 in its first month, but its profit increases by $400 in each succeeding month for the rest of its first year. What is its profit in the twelfth month? ​

Accepted Answer

A) $6,800 
B) $2,800 
C) $3,200 
D) $6,000 
E) $4,400 
A) $6,800 
B) $2,800 
C) $3,200 
D) $6,000 
E) $4,400

Question 18

A couple has determined that they need $400,000 to establish an annuity when they retire in 27 years. How much money should they deposit at the end of each month in an investment plan that pays an annual rate of 8%, compounded monthly, so they will have the $400,000 in 27 years? Round your answer to the nearest cent.

Accepted Answer

A) $1,378.73 
B) $350.45 
C) $531.88 
D) $13,570.66 
E) $6,178.30 
A) $1,378.73 
B) $350.45 
C) $531.88 
D) $13,570.66 
E) $6,178.30

Question 19

A recent college graduate buys a new car by borrowing $15,000 at 9.6%, compounded monthly, for 5 years. She decides to pay an extra $10 per payment. How many payments (that include the extra $10) will she make, including the final partial payment? ​

Accepted Answer

A) 51 
B) 65 
C) 70 
D) 58 
E) 61 
A) 51 
B) 65 
C) 70 
D) 58 
E) 61

Question 20

What does the number 0.05 represent in the given equation:   . ​

Accepted Answer

A) annual interest rate 
B) interest 
C) future value 
D) time 
E) principal 
A) annual interest rate 
B) interest 
C) future value 
D) time 
E) principal

What is the annual percentage yield (or effective annual rate) for a nominal rate of 12% compounded continuously? Round your answer to two decimal places.

What is the present value of an investment at 15% annual simple interest if it is worth $924.50 in 6 months? Round your answer to the nearest cent.

If you lend $3,500 to a friend for 19 months at 8% annual simple interest, find the future value of loan. Round your answer to the nearest cent.

Given 10 and 30 year loans with the same interest rate, the 30 year loan results in a lower periodic payment.

A sinking fund is established to discharge a debt of $80,000 in 11 years. If deposits are made at the end of each 6-month period and interest is paid at the annual rate of 6%, compounded semiannually, what is the amount of each deposit? Round your answer to the nearest cent.

How much is needed in an account that earns an annual rate of 8.4% compounded monthly in order to withdraw $1,200 at the end of each month for 22 years? Round your answer to the nearest cent.

A developer wants to buy a certain parcel of land. The developer feels she can afford payments of $26,000 each half-year for the next 6 years. How much can she borrow and hold to this budget at an annual rate of 7.2% compounded semianually? Round your answer to the nearest cent.

Which of the following expresses the sum of the first 29 terms of the geometric sequence ....?

What is the size of the payments that must be deposited at the beginning of each 6-month period in an account that pays an annual rate of 8%, compounded semiannually, so that the account will have a future value of $110,000 at the end of 11 years? Round your answer to the nearest cent.

Suppose an individual wants to have $190,000 available for her child's education. Find the amount that would have to be invested at annual rate 10%, compounded continuously, if the number of years until college is 17 years. Round your answer to the nearest cent.

Write an expression that gives the requested term or sum. The sum of the first 12 terms of the geometric sequence with first term 6 and common ratio 7.

A new firm loses $1,600 in its first month, but its profit increases by $400 in each succeeding month for the rest of its first year. What is its profit in the twelfth month?

A recent college graduate buys a new car by borrowing $15,000 at 9.6%, compounded monthly, for 5 years. She decides to pay an extra $10 per payment. How many payments (that include the extra $10) will she make, including the final partial payment?

What does the number 0.05 represent in the given equation: .

Algebraic Concepts

Linear Equations and Functions

Quadratic and Other Special Functions

Matrices

Inequalities and Linear Programming

Exponential and Logarithmic Functions

Introduction to Probability

Further Topics in Probability; Data Description

Derivatives

Applications of Derivatives

Derivatives Continued

Indefinite Integrals

Definite Integrals: Techniques of Integration

Functions of Two or More Variables

Filters

Exam 7: Mathematics of Finance

What is the annual percentage yield (or effective annual rate) for a nominal rate of 12% compounded continuously? Round your answer to two decimal places. ​

What is the present value of an investment at 15% annual simple interest if it is worth $924.50 in 6 months? Round your answer to the nearest cent. ​

If you lend $3,500 to a friend for 19 months at 8% annual simple interest, find the future value of loan. Round your answer to the nearest cent. ​

Given 10 and 30 year loans with the same interest rate, the 30 year loan results in a lower periodic payment.

A sinking fund is established to discharge a debt of $80,000 in 11 years. If deposits are made at the end of each 6-month period and interest is paid at the annual rate of 6%, compounded semiannually, what is the amount of each deposit? Round your answer to the nearest cent. ​

How much is needed in an account that earns an annual rate of 8.4% compounded monthly in order to withdraw $1,200 at the end of each month for 22 years? Round your answer to the nearest cent. ​

A developer wants to buy a certain parcel of land. The developer feels she can afford payments of $26,000 each half-year for the next 6 years. How much can she borrow and hold to this budget at an annual rate of 7.2% compounded semianually? Round your answer to the nearest cent. ​

Which of the following expresses the sum of the first 29 terms of the geometric sequence ....? ​

What is the size of the payments that must be deposited at the beginning of each 6-month period in an account that pays an annual rate of 8%, compounded semiannually, so that the account will have a future value of $110,000 at the end of 11 years? Round your answer to the nearest cent. ​

Suppose an individual wants to have $190,000 available for her child's education. Find the amount that would have to be invested at annual rate 10%, compounded continuously, if the number of years until college is 17 years. Round your answer to the nearest cent.

Write an expression that gives the requested term or sum. ​ The sum of the first 12 terms of the geometric sequence with first term 6 and common ratio 7. ​

A new firm loses $1,600 in its first month, but its profit increases by $400 in each succeeding month for the rest of its first year. What is its profit in the twelfth month? ​

A recent college graduate buys a new car by borrowing $15,000 at 9.6%, compounded monthly, for 5 years. She decides to pay an extra $10 per payment. How many payments (that include the extra $10) will she make, including the final partial payment? ​

What does the number 0.05 represent in the given equation: . ​

Algebraic Concepts

Linear Equations and Functions

Quadratic and Other Special Functions

Matrices

Inequalities and Linear Programming

Exponential and Logarithmic Functions

Introduction to Probability

Further Topics in Probability; Data Description

Derivatives

Applications of Derivatives

Derivatives Continued

Indefinite Integrals

Definite Integrals: Techniques of Integration

Functions of Two or More Variables

Filters

What is the annual percentage yield (or effective annual rate) for a nominal rate of 12% compounded continuously? Round your answer to two decimal places.

What is the present value of an investment at 15% annual simple interest if it is worth $924.50 in 6 months? Round your answer to the nearest cent.

If you lend $3,500 to a friend for 19 months at 8% annual simple interest, find the future value of loan. Round your answer to the nearest cent.

A sinking fund is established to discharge a debt of $80,000 in 11 years. If deposits are made at the end of each 6-month period and interest is paid at the annual rate of 6%, compounded semiannually, what is the amount of each deposit? Round your answer to the nearest cent.

How much is needed in an account that earns an annual rate of 8.4% compounded monthly in order to withdraw $1,200 at the end of each month for 22 years? Round your answer to the nearest cent.

A developer wants to buy a certain parcel of land. The developer feels she can afford payments of $26,000 each half-year for the next 6 years. How much can she borrow and hold to this budget at an annual rate of 7.2% compounded semianually? Round your answer to the nearest cent.

Which of the following expresses the sum of the first 29 terms of the geometric sequence ....?

What is the size of the payments that must be deposited at the beginning of each 6-month period in an account that pays an annual rate of 8%, compounded semiannually, so that the account will have a future value of $110,000 at the end of 11 years? Round your answer to the nearest cent.

Write an expression that gives the requested term or sum. The sum of the first 12 terms of the geometric sequence with first term 6 and common ratio 7.

A new firm loses $1,600 in its first month, but its profit increases by $400 in each succeeding month for the rest of its first year. What is its profit in the twelfth month?

A recent college graduate buys a new car by borrowing $15,000 at 9.6%, compounded monthly, for 5 years. She decides to pay an extra $10 per payment. How many payments (that include the extra $10) will she make, including the final partial payment?

What does the number 0.05 represent in the given equation: .