Question 1

Find the total return earned by the given bond.
-

Accepted Answer

A)  $\$ 585,000$ 
B)  $\$ 5850$ 
C)  $\$ 585$ 
D)  $\$ 58,500$ 
A)  $\$ 585,000$ 
B)  $\$ 5850$ 
C)  $\$ 585$ 
D)  $\$ 58,500$

Question 2

For the given investment, assume that there is no opportunity for reinvestment of returns. Find the monthly return,
annual return, or annual percentage return as indicated.
-$$\begin{array} { c c } 
\text { Amount } & \text { Monthly Percentage } \
\text { Invested } & \text { Return } \
\$ 3281 & 1.2 \%
\end{array}$$ Find the monthly return.

Accepted Answer

A) $3937.20 
B) $393.72 
C) $39.37 
D) $32.81 
A) $3937.20 
B) $393.72 
C) $39.37 
D) $32.81

Question 3

Solve the problem.
-Find the final value, after all taxes are paid, for the following retirement account. Assume that taxes are deferred and that deposits are made at the end of each year. Marginal tax rate: $\quad 10 \%$
Regular deferred contribution: $\$ 1000$
Annual rate of return: $\quad 5 \%$
Number of years: 30

Accepted Answer

A)  $\$ 68,166.26$ 
B)  $\$ 59,794.96$ 
C)  $\$ 55,609.32$ 
D)  $\$ 62,784.71$ 
A)  $\$ 68,166.26$ 
B)  $\$ 59,794.96$ 
C)  $\$ 55,609.32$ 
D)  $\$ 62,784.71$

Question 4

Solve the problem.
-The unpaid balance in an account on May 1 was $221. A purchase of $27 was made on May 8. A $80 payment was made on May 22. The finance charge rate was 1.25% per month of the average
Daily balance. Find the new balance at the end of May.

Accepted Answer

A) $170.70 
B) $222.23 
C) $169.25 
D) $142.19 
A) $170.70 
B) $222.23 
C) $169.25 
D) $142.19

Question 5

Find the APR (true annual interest rate), to the nearest half percent, for the following loan.
-Amount Financed = $7200 Finance Charge = $2230
Number of Monthly Payments = 60

Accepted Answer

A) 10.5% 
B) 12% 
C) 11.5% 
D) 11% 
A) 10.5% 
B) 12% 
C) 11.5% 
D) 11%

Question 6

Use the actuarial method to find the amount of unearned interest for the loan paid in full before the due date.
-Regular Monthly Payment: $316.37 APR: 10.2%
Remaining Number of Scheduled Payments After Payoff: 20

Accepted Answer

A) $585.60 
B) $503.03 
C) $531.17 
D) $614.07 
A) $585.60 
B) $503.03 
C) $531.17 
D) $614.07

Question 7

Use the Rule of 78 to find the payoff amount for the loan paid in full before the date of maturity.
-Finance charge: $340 Total number of payments: 26
Amount per payment: $186
Remaining number of payments, when paid in full: 3

Accepted Answer

A) $555.09 
B) $741.09 
C) $552.19 
D) $738.19 
A) $555.09 
B) $741.09 
C) $552.19 
D) $738.19

Question 8

A homeowner installed a new swimming pool for $4000. He paid 8% down and then paid 36 monthly payments of $115.32. Determine the APR of the loan to the nearest one-half of a percent.

Accepted Answer

A) 8.5% 
B) 9.0% 
C) 10.0% 
D) 8.0% 
A) 8.5% 
B) 9.0% 
C) 10.0% 
D) 8.0%

Question 9

Solve the problem.
-The monthly payment on a(n)$59,000 loan at 11% annual interest is $670.59. How much of the first monthly payment will go toward the principal?

Accepted Answer

A) $73.76 
B) $129.76 
C) $540.83 
D) $596.83 
A) $73.76 
B) $129.76 
C) $540.83 
D) $596.83

Question 10

The following problem involves adjustable-rate mortgage. You will need a table of monthly payments.
-Harry has a 1-year ARM for $75,000 over a 25-year term. The margin is 2%, and the index rate starts out at 8.5% and increases to 10% at the first adjustment. The balance of principal at the end of
The first year is $74,113.56. If the monthly payment for the first year is $708.14, how much more will
His monthly payment be for the second year?

Accepted Answer

A) $114.00 
B) $47.31 
C) $77.75 
D) None of the above is correct. 
A) $114.00 
B) $47.31 
C) $77.75 
D) None of the above is correct.

Question 11

Solve the problem.
-Find the future value (to the nearest dollar)of the following inflation-adjusted retirement account. Deposits are made at the end of each year. Annual inflation rate: $1 \%$
Initial deposit: $\quad \$ 2500$
Annual rate of return: $5 \%$
Number of years: 20

Accepted Answer

A)  $\$ 85,091$ 
B)  $\$ 103,005$ 
C)  $\$ 97,630$ 
D)  $\$ 89,569$ 
A)  $\$ 85,091$ 
B)  $\$ 103,005$ 
C)  $\$ 97,630$ 
D)  $\$ 89,569$

Question 12

Find the future value of the deposit if the account pays simple interest.
-$760 at 4% for 9 months

Accepted Answer

A) $782.99 
B) $780.27 
C) $785.33 
D) $782.80 
A) $782.99 
B) $780.27 
C) $785.33 
D) $782.80

Question 13

Solve the problem. Use an annual percentage rate table if necessary.
-Reggie King took out a 36-month fixed installment loan of $20,000 to open a sporting goods store. He began making monthly payments of $631.33. Reggie's business does better than expected and
Instead of making his 18th payment, Reggie decides to repay his loan in full. What is the total
Amount due to pay off the balance (use the actuarial method)?

Accepted Answer

A) $10,584.43 
B) $10,634.48 
C) $11,265.81 
D) $10,713.08 
A) $10,584.43 
B) $10,634.48 
C) $11,265.81 
D) $10,713.08

Question 14

Constance Hairston obtains a 20-year, $133,750 mortgage at 11% on a house selling for $159,000. Her monthly payment, including principal and interest, is $1380.55. How much of the total cost
Will be interest?

Accepted Answer

A) 61.9% 
B) 40.4% 
C) 57.9% 
D) 59.6% 
A) 61.9% 
B) 40.4% 
C) 57.9% 
D) 59.6%

Question 15

For the given investment, assume that there is no opportunity for reinvestment of returns. Find the monthly return,
annual return, or annual percentage return as indicated.
-$$\begin{array} { c c } 
\text { Amount } & \text { Monthly Percentage } \
\text { Invested } & \text { Return } \
\$ 4281 & 0.57 \%
\end{array}$$ Find the annual percentage return.

Accepted Answer

A) 292.82% 
B) 6.84% 
C) 5.7% 
D) 7.06% 
A) 292.82% 
B) 6.84% 
C) 5.7% 
D) 7.06%

Question 16

Solve the problem.
-Barb is buying a new car for $13,000. Her old car has a trade-in Value of $2500. The dealer informs her that the financing charge is 7% add-on interest. If she wishes to take 2 years to pay off the car,
What will be the total amount to be repaid?

Accepted Answer

A) $11,235.00 
B) $14,820.00 
C) $11,970.00 
D) $157,500.00 
A) $11,235.00 
B) $14,820.00 
C) $11,970.00 
D) $157,500.00

Question 17

Find the effective annual interest rate for the given nominal annual interest rate. Round your answers to the nearest
0.01%.
-3% compounded quarterly

Accepted Answer

A) 3.04% 
B) 3.02% 
C) 3.00% 
D) 3.03% 
A) 3.04% 
B) 3.02% 
C) 3.00% 
D) 3.03%

Question 18

Solve the problem. Assume that simple interest is being calculated in each case. Round the answer to the nearest cent
unless otherwise indicated.
-John forgot to pay his $408.00 income tax on time. The IRS charged a penalty of 5% for the 74 days the money was late. Find the penalty that was paid. (Use a 365 day year.)

Accepted Answer

A) $4.14 
B) $0.34 
C) $4.08 
D) $412.14 
A) $4.14 
B) $0.34 
C) $4.08 
D) $412.14

Question 19

Solve the problem. Use an annual percentage rate table if necessary.
-A retired couple buys a new recreational vehicle (RV)for $42,000. They make a down payment of $13,000 and finance the balance at 9.0% APR over 60 months. Before making the 30th payment, the
Couple decides to pay the remaining balance on the loan. How much interest will the couple save
(use the actuarial method)?

Accepted Answer

A) $2810.71 
B) $2174.39 
C) $1918.14 
D) $1940.73 
A) $2810.71 
B) $2174.39 
C) $1918.14 
D) $1940.73

Question 20

Use the Rule of 78 to find the amount of unearned interest for the loan paid in full before the date of maturity.
-Finance charge: $6385 Total number of payments: 50
Remaining number of payments, when paid in full: 11

Accepted Answer

A) $286.67 
B) $330.52 
C) $344.01 
D) $275.43 
A) $286.67 
B) $330.52 
C) $344.01 
D) $275.43

Find the total return earned by the given bond. -

For the given investment, assume that there is no opportunity for reinvestment of returns. Find the monthly return, annual return, or annual percentage return as indicated. - Amount Monthly Percentage Invested Return \ 3281 1.2\% Find the monthly return.

Solve the problem. -The unpaid balance in an account on May 1 was $221. A purchase of $27 was made on May 8. A $80 payment was made on May 22. The finance charge rate was 1.25% per month of the average Daily balance. Find the new balance at the end of May.

Find the APR (true annual interest rate), to the nearest half percent, for the following loan. -Amount Financed = $7200 Finance Charge = $2230 Number of Monthly Payments = 60

Use the actuarial method to find the amount of unearned interest for the loan paid in full before the due date. -Regular Monthly Payment: $316.37 APR: 10.2% Remaining Number of Scheduled Payments After Payoff: 20

Use the Rule of 78 to find the payoff amount for the loan paid in full before the date of maturity. -Finance charge: $340 Total number of payments: 26 Amount per payment: $186 Remaining number of payments, when paid in full: 3

A homeowner installed a new swimming pool for $4000. He paid 8% down and then paid 36 monthly payments of $115.32. Determine the APR of the loan to the nearest one-half of a percent.

Solve the problem. -The monthly payment on a(n)$59,000 loan at 11% annual interest is $670.59. How much of the first monthly payment will go toward the principal?

Solve the problem. -Find the future value (to the nearest dollar)of the following inflation-adjusted retirement account. Deposits are made at the end of each year. Annual inflation rate: $1 \%$ Initial deposit: $\quad \$ 2500$ Annual rate of return: $5 \%$ Number of years: 20

Find the future value of the deposit if the account pays simple interest. -$760 at 4% for 9 months

Constance Hairston obtains a 20-year, $133,750 mortgage at 11% on a house selling for $159,000. Her monthly payment, including principal and interest, is $1380.55. How much of the total cost Will be interest?

For the given investment, assume that there is no opportunity for reinvestment of returns. Find the monthly return, annual return, or annual percentage return as indicated. - Amount Monthly Percentage Invested Return \ 4281 0.57\% Find the annual percentage return.

Solve the problem. -Barb is buying a new car for $13,000. Her old car has a trade-in Value of $2500. The dealer informs her that the financing charge is 7% add-on interest. If she wishes to take 2 years to pay off the car, What will be the total amount to be repaid?

Find the effective annual interest rate for the given nominal annual interest rate. Round your answers to the nearest 0.01%. -3% compounded quarterly

Use the Rule of 78 to find the amount of unearned interest for the loan paid in full before the date of maturity. -Finance charge: $6385 Total number of payments: 50 Remaining number of payments, when paid in full: 11

The Art of Problem Solving

The Basic Concepts of Set Theory

Introduction to Logic

Numeration Systems

Number Theory

The Real Numbers and Their Representations

The Basic Concepts of Algebra

Graphs, Functions, and Systems of Equations and Inequalities

Geometry

Counting Methods

Probability

Statistics

Trigonometry Formerly

Graph Theory

Voting and Apportionment

Filters

Exam 13: Personal Financial Management

Find the total return earned by the given bond. -

For the given investment, assume that there is no opportunity for reinvestment of returns. Find the monthly return, annual return, or annual percentage return as indicated. - Amount Monthly Percentage Invested Return \ 3281 1.2\% Find the monthly return.

Solve the problem. -The unpaid balance in an account on May 1 was $221. A purchase of $27 was made on May 8. A $80 payment was made on May 22. The finance charge rate was 1.25% per month of the average Daily balance. Find the new balance at the end of May.

Find the APR (true annual interest rate), to the nearest half percent, for the following loan. -Amount Financed = $7200 Finance Charge = $2230 Number of Monthly Payments = 60

Use the actuarial method to find the amount of unearned interest for the loan paid in full before the due date. -Regular Monthly Payment: $316.37 APR: 10.2% Remaining Number of Scheduled Payments After Payoff: 20

Use the Rule of 78 to find the payoff amount for the loan paid in full before the date of maturity. -Finance charge: $340 Total number of payments: 26 Amount per payment: $186 Remaining number of payments, when paid in full: 3

A homeowner installed a new swimming pool for $4000. He paid 8% down and then paid 36 monthly payments of $115.32. Determine the APR of the loan to the nearest one-half of a percent.

Solve the problem. -The monthly payment on a(n)$59,000 loan at 11% annual interest is $670.59. How much of the first monthly payment will go toward the principal?

Solve the problem. -Find the future value (to the nearest dollar)of the following inflation-adjusted retirement account. Deposits are made at the end of each year. Annual inflation rate: 1%1 \%1% Initial deposit: $2500\quad \$ 2500$2500 Annual rate of return: 5%5 \%5% Number of years: 20

Find the future value of the deposit if the account pays simple interest. -$760 at 4% for 9 months

Constance Hairston obtains a 20-year, $133,750 mortgage at 11% on a house selling for $159,000. Her monthly payment, including principal and interest, is $1380.55. How much of the total cost Will be interest?

For the given investment, assume that there is no opportunity for reinvestment of returns. Find the monthly return, annual return, or annual percentage return as indicated. - Amount Monthly Percentage Invested Return \ 4281 0.57\% Find the annual percentage return.

Solve the problem. -Barb is buying a new car for $13,000. Her old car has a trade-in Value of $2500. The dealer informs her that the financing charge is 7% add-on interest. If she wishes to take 2 years to pay off the car, What will be the total amount to be repaid?

Find the effective annual interest rate for the given nominal annual interest rate. Round your answers to the nearest 0.01%. -3% compounded quarterly

Use the Rule of 78 to find the amount of unearned interest for the loan paid in full before the date of maturity. -Finance charge: $6385 Total number of payments: 50 Remaining number of payments, when paid in full: 11

The Art of Problem Solving

The Basic Concepts of Set Theory

Introduction to Logic

Numeration Systems

Number Theory

The Real Numbers and Their Representations

The Basic Concepts of Algebra

Graphs, Functions, and Systems of Equations and Inequalities

Geometry

Counting Methods

Probability

Statistics

Trigonometry Formerly

Graph Theory

Voting and Apportionment

Filters

Solve the problem. -Find the future value (to the nearest dollar)of the following inflation-adjusted retirement account. Deposits are made at the end of each year. Annual inflation rate: $1 \%$ Initial deposit: $\quad \$ 2500$ Annual rate of return: $5 \%$ Number of years: 20