Question 1

Use the compound interest formula to compute the future value of the investment.
-$1620 at 7.4% compounded annually for 16 years

Accepted Answer

A) $3418.20 
B) $4726.93 
C) $3538.08 
D) $5076.72 
A) $3418.20 
B) $4726.93 
C) $3538.08 
D) $5076.72

Question 2

Use the compound interest formula to compute the future value of the investment.
-$9000 at 8% compounded semiannually for 8 years

Accepted Answer

A) $14,760.00 
B) $12,317.12 
C) $16,658.37 
D) $16,856.83 
A) $14,760.00 
B) $12,317.12 
C) $16,658.37 
D) $16,856.83

Question 3

Solve the problem. If necessary, use the table of monthly payments below. Round your answer to the nearest cent.
Monthly Payments to Repay Principal and Interest on a $1000 Mortgage  
-Find the monthly payment needed to amortize principal and interest for the following fixed-rate mortgage.
Mortgage amount: $195,100
Term of mortgage: 5 years
Interest rate: 8.5%

Accepted Answer

A) $<4002.78 
B) $4049.96 
C) $3955.92 
D) $2418.96 
A) $<4002.78 
B) $4049.96 
C) $3955.92 
D) $2418.96

Question 4

Use the compound interest formula to compute the future value of the investment.
-$800 at 6.3% compounded semiannually for 12 years

Accepted Answer

A) $1665.29 
B) $1684.04 
C) $1404.80 
D) $1160.70 
A) $1665.29 
B) $1684.04 
C) $1404.80 
D) $1160.70

Question 5

Find the effective annual interest rate for the given nominal annual interest rate. Round your answers to the nearest
0.01%.
-5% compounded semiannually

Accepted Answer

A) 5.12% 
B) 5.00% 
C) 5.09% 
D) 5.06% 
A) 5.12% 
B) 5.00% 
C) 5.09% 
D) 5.06%

Question 6

Solve the problem.
-$8791 is deposited into a savings account at 8% interest, compounded annually. To the nearest year, how long will it take for the account balance to reach $1,000,000?

Accepted Answer

A) 62 years 
B) 55 years 
C) 43 years 
D) 86 years 
A) 62 years 
B) 55 years 
C) 43 years 
D) 86 years

Question 7

The owner of an automobile repair center purchased new electronic diagnostic equipment for $15,000. He paid 10% down and then paid 60 monthly payments of $296.91. Determine the APR of
The loan to the nearest one-half of a percent.

Accepted Answer

A) 11.5% 
B) 10.5% 
C) 13.0% 
D) 10.0% 
A) 11.5% 
B) 10.5% 
C) 13.0% 
D) 10.0%

Question 8

A borrower uses an income tax refund to make a partial payment on a personal
simple-interest loan. Which rules or methods can be used to compute the new balance?

Accepted Answer

The United

Question 9

Solve the problem.
-Use the rule of 70 to estimate the years to double for an annual inflation rate of 6%.

Accepted Answer

A) 9 years 
B) 13 years 
C) 12 years 
D) 14 years 
A) 9 years 
B) 13 years 
C) 12 years 
D) 14 years

Question 10

On the July 5 billing date, David had a balance due of $1027.85 on his credit card. The transactions during the following month were: $$\begin{array} { l l c } 
\text { July 6 } & \text { Payment } & \$ 281.80 \
\text { July 19 } & \text { Charge: auto repair } &\$ 350 \
\text { August } 1 & \text { Charge: clothing } & \$ 122.27
\end{array}$$ The interest rate on the card is 1.3% per month. Using the average daily balance method, find the
Finance charge on August 5 (July has 31 days).

Accepted Answer

A) $12.37 
B) $12.41 
C) $12.52 
D) $11.89 
A) $12.37 
B) $12.41 
C) $12.52 
D) $11.89

Question 11

Find the compound interest earned by the deposit. Round to the nearest cent.
-$300 at 3% compounded quarterly for 3 years

Accepted Answer

A) $27.00 
B) $28.14 
C) $306.80 
D) $27.82 
A) $27.00 
B) $28.14 
C) $306.80 
D) $27.82

Question 12

Solve the problem.
-Ellen invests her money in a savings account which compounds interest quarterly and which gives an effective annual yield of 4.18%. What is the nominal rate?

Accepted Answer

A) 4.12% 
B) 4.14% 
C) 4.25% 
D) 4.09% 
A) 4.12% 
B) 4.14% 
C) 4.25% 
D) 4.09%

Question 13

Consider a Ponzi scheme where investors are promised 100% profit per quarter and at the beginning of each quarter (90 days), 1000 investors contribute $1000 each, and all monies stay in
Until the end of the year. Suppose that at the end of the year, 10% of investors actually invest
Another $2000 rather than taking out profit. Now what amount stays with the operator going into
The second year?

Accepted Answer

A) $1,200,000 
B) $21,000,000 
C) $4,800,000 
D) $84,000,000 
A) $1,200,000 
B) $21,000,000 
C) $4,800,000 
D) $84,000,000

Question 14

Solve the problem.
-The cash price of a fitness system is $659.99. The customer paid $115 as a down payment. The remainder will be paid in 36 monthly installments of $19.16 each. Find the amount of the finance
Charge.

Accepted Answer

A) $29.77 
B) $689.76 
C) $144.77 
D) $141.17 
A) $29.77 
B) $689.76 
C) $144.77 
D) $141.17

Question 15

In order to purchase a home, a family borrows $140,000 to be amortized at 9% interest. How much more interest will be paid in total if the term of the loan is 25 years than if it is 10 years?

Accepted Answer

A) $114,446.98 
B) $139,646.98 
C) $127,046.98 
D) $147,066.98 
A) $114,446.98 
B) $139,646.98 
C) $127,046.98 
D) $147,066.98

Question 16

Solve the problem.
-For the given stock investment, find the percentage return:

Accepted Answer

A)  $45.4 \%$ 
B)  $63.9 \%$ 
C)  $163.9 \%$ 
D)  $40.6 \%$ 
A)  $45.4 \%$ 
B)  $63.9 \%$ 
C)  $163.9 \%$ 
D)  $40.6 \%$

Question 17

Solve the problem using the rule of 78.
-Jamal has a 60-month fixed installment loan, with a monthly payment of $276.00. The amount he borrowed was $11,500. Instead of making his 39th payment, Jamal is paying the remaining balance
On the loan. How much interest will Jamal save?

Accepted Answer

A) $734.53 
B) $638.72 
C) $600.34 
D) $574.85 
A) $734.53 
B) $638.72 
C) $600.34 
D) $574.85

Question 18

Which of the following are rules for computing finance charges on open installment loans:
actuarial method, average daily balance method, rule of 78s, United States rule, banker's
rule, unpaid balance method?

Accepted Answer

Average daily balanc

Question 19

Solve the problem using the rule of 78.
-Caroline Jones took out a 48-month fixed installment loan of $21,000 to open a restaurant. She began making monthly payments of $520.63. Caroline's business does better than expected and
Instead of making her 24th payment, Caroline decides to repay her loan in full. What is the total
Amount due to pay off the balance?

Accepted Answer

A) $11,477.14 
B) $12,280.54 
C) $11,997.77 
D) $11,518.72 
A) $11,477.14 
B) $12,280.54 
C) $11,997.77 
D) $11,518.72

Question 20

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. Find the amount of monthly payment for the first month of the first year.

Accepted Answer

A) $708.14 
B) $689.42 
C) $718.14 
D) None of the above is correct. 
A) $708.14 
B) $689.42 
C) $718.14 
D) None of the above is correct.

Use the compound interest formula to compute the future value of the investment. -$1620 at 7.4% compounded annually for 16 years

Use the compound interest formula to compute the future value of the investment. -$9000 at 8% compounded semiannually for 8 years

Use the compound interest formula to compute the future value of the investment. -$800 at 6.3% compounded semiannually for 12 years

Find the effective annual interest rate for the given nominal annual interest rate. Round your answers to the nearest 0.01%. -5% compounded semiannually

Solve the problem. -$8791 is deposited into a savings account at 8% interest, compounded annually. To the nearest year, how long will it take for the account balance to reach $1,000,000?

The owner of an automobile repair center purchased new electronic diagnostic equipment for $15,000. He paid 10% down and then paid 60 monthly payments of $296.91. Determine the APR of The loan to the nearest one-half of a percent.

A borrower uses an income tax refund to make a partial payment on a personal simple-interest loan. Which rules or methods can be used to compute the new balance?

Solve the problem. -Use the rule of 70 to estimate the years to double for an annual inflation rate of 6%.

Find the compound interest earned by the deposit. Round to the nearest cent. -$300 at 3% compounded quarterly for 3 years

Solve the problem. -Ellen invests her money in a savings account which compounds interest quarterly and which gives an effective annual yield of 4.18%. What is the nominal rate?

Solve the problem. -The cash price of a fitness system is $659.99. The customer paid $115 as a down payment. The remainder will be paid in 36 monthly installments of $19.16 each. Find the amount of the finance Charge.

In order to purchase a home, a family borrows $140,000 to be amortized at 9% interest. How much more interest will be paid in total if the term of the loan is 25 years than if it is 10 years?

Solve the problem. -For the given stock investment, find the percentage return:

Solve the problem using the rule of 78. -Jamal has a 60-month fixed installment loan, with a monthly payment of $276.00. The amount he borrowed was $11,500. Instead of making his 39th payment, Jamal is paying the remaining balance On the loan. How much interest will Jamal save?

Which of the following are rules for computing finance charges on open installment loans: actuarial method, average daily balance method, rule of 78s, United States rule, banker's rule, unpaid balance method?

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

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Exam 13: Personal Financial Management

Use the compound interest formula to compute the future value of the investment. -$1620 at 7.4% compounded annually for 16 years

Use the compound interest formula to compute the future value of the investment. -$9000 at 8% compounded semiannually for 8 years

Use the compound interest formula to compute the future value of the investment. -$800 at 6.3% compounded semiannually for 12 years

Find the effective annual interest rate for the given nominal annual interest rate. Round your answers to the nearest 0.01%. -5% compounded semiannually

Solve the problem. -$8791 is deposited into a savings account at 8% interest, compounded annually. To the nearest year, how long will it take for the account balance to reach $1,000,000?

The owner of an automobile repair center purchased new electronic diagnostic equipment for $15,000. He paid 10% down and then paid 60 monthly payments of $296.91. Determine the APR of The loan to the nearest one-half of a percent.

A borrower uses an income tax refund to make a partial payment on a personal simple-interest loan. Which rules or methods can be used to compute the new balance?

Solve the problem. -Use the rule of 70 to estimate the years to double for an annual inflation rate of 6%.

Find the compound interest earned by the deposit. Round to the nearest cent. -$300 at 3% compounded quarterly for 3 years

Solve the problem. -Ellen invests her money in a savings account which compounds interest quarterly and which gives an effective annual yield of 4.18%. What is the nominal rate?

Solve the problem. -The cash price of a fitness system is $659.99. The customer paid $115 as a down payment. The remainder will be paid in 36 monthly installments of $19.16 each. Find the amount of the finance Charge.

In order to purchase a home, a family borrows $140,000 to be amortized at 9% interest. How much more interest will be paid in total if the term of the loan is 25 years than if it is 10 years?

Solve the problem. -For the given stock investment, find the percentage return:

Solve the problem using the rule of 78. -Jamal has a 60-month fixed installment loan, with a monthly payment of $276.00. The amount he borrowed was $11,500. Instead of making his 39th payment, Jamal is paying the remaining balance On the loan. How much interest will Jamal save?

Which of the following are rules for computing finance charges on open installment loans: actuarial method, average daily balance method, rule of 78s, United States rule, banker's rule, unpaid balance method?

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