Question 1

Under what circumstances is the Average Daily Balance method a more favorable method
to the borrower than the Unpaid Balance method? Explain.

Accepted Answer

The average daily balance method is more

Question 2

Solve the problem.
-The monthly payment on a(n)$71,000 loan at 12% annual interest is $785.26. What is the balance of principal after the first monthly payment?

Accepted Answer

A) $70,397.80 
B) $70,924.74 
C) $71,710.00 
D) $70,219.00 
A) $70,397.80 
B) $70,924.74 
C) $71,710.00 
D) $70,219.00

Question 3

Solve the problem.
-For the given stock investment, find the total return: Number Purchase Price Dividend Sale Price
Of Shares Per Share Per Share Per Share
100 $9.20 $2.72 $14.80

Accepted Answer

A) $832 
B) $1752 
C) $1480 
D) $560 
A) $832 
B) $1752 
C) $1480 
D) $560

Question 4

Find the future value of the deposit if the account pays simple interest.
-$1800 at 3% for 5 years

Accepted Answer

A) $2070 
B) $2065 
C) $2124 
D) $1942 
A) $2070 
B) $2065 
C) $2124 
D) $1942

Question 5

Consider the first four levels of a pyramid scheme where "each one recruits six." a)If you are the top person in the chart, and each person's entry fee is $1, how much money will you receive and
What will your profit be? b)What is the total number of members from level 1 through level 4?

Accepted Answer

A)  a) $\$ 46,656 ; \$ 46,655$
b) 1554 
B)  a) $\$ 46,656 ; \$ 46,655$
b) 1555 
C)  a) $\$ 216 ; \$ 7770$
b) 258 
D)  a) $\$ 216$; $\$ 215$
b) 259 
A)  a) $\$ 46,656 ; \$ 46,655$
b) 1554 
B)  a) $\$ 46,656 ; \$ 46,655$
b) 1555 
C)  a) $\$ 216 ; \$ 7770$
b) 258 
D)  a) $\$ 216$; $\$ 215$
b) 259

Question 6

Solve the problem. Use the Annual Percentage Rate Table if necessary.
-Find the APR to the nearest half percent, for the following data.

Accepted Answer

A)  $8.5 \%$ 
B)  $9.5 \%$ 
C)  $9 \%$ 
D)  $8 \%$ 
A)  $8.5 \%$ 
B)  $9.5 \%$ 
C)  $9 \%$ 
D)  $8 \%$

Question 7

Find the total return earned by the given bond.
-

Accepted Answer

A)  $\$ 1844.6$ 
B)  $\$ 24,844.60$ 
C)  $\$ 18,446$ 
D)  $\$ 184,460$ 
A)  $\$ 1844.6$ 
B)  $\$ 24,844.60$ 
C)  $\$ 18,446$ 
D)  $\$ 184,460$

Question 8

In a Ponzi scheme, where Ponzi promised investors a 50% profit within 45 days or a 100% profit within 90 days, how many investors would be required by the end of two and a quarter years with
The same promised return?

Accepted Answer

A) 512 
B) 192 
C) 128 
D) 256 
A) 512 
B) 192 
C) 128 
D) 256

Question 9

Find the present value for the given future amount. Round to the nearest cent.
-A = $12,400, 3 years r = 4% compounded annually

Accepted Answer

A) $11,023.55 
B) $1376.45 
C) $13,948.31 
D) $11,464.50 
A) $11,023.55 
B) $1376.45 
C) $13,948.31 
D) $11,464.50

Question 10

Solve the problem. Use an annual percentage rate table if necessary.
-Jennifer has a 60-month fixed installment loan, with a monthly payment of $168.01. The amount she borrowed was $8000. Instead of making her 12th payment, Jennifer is paying the remaining
Balance on the loan. What is the total amount due to pay off the balance (use the actuarial method)?

Accepted Answer

A) $6855.67 
B) $6765.67 
C) $6404.13 
D) $6687.65 
A) $6855.67 
B) $6765.67 
C) $6404.13 
D) $6687.65

Question 11

Solve the problem.
-An item is purchased for $2000 with a down payment of $500. There is a finance charge of $100. Find the monthly payment if 24 payments are made.

Accepted Answer

A) $87.50 
B) $62.50 
C) $66.67 
D) None of the above is correct. 
A) $87.50 
B) $62.50 
C) $66.67 
D) None of the above is correct.

Question 12

Constance Hairston obtains a 25-year, $145,550 mortgage at 11.5% on a house selling for $171,000. Her monthly payment, including principal and interest, is $1479.47. How much of the total cost
Will be interest?

Accepted Answer

A) $387,778.55 
B) $298,291.19 
C) $277,410.81 
D) $328,120.31 
A) $387,778.55 
B) $298,291.19 
C) $277,410.81 
D) $328,120.31

Question 13

Consider a pyramid scheme where "each one recruits six." 
a.How many members are in the second and third levels? 
b.In general, how many members are in level N?

Accepted Answer

A)  a) 6,216
b) $6 ^{\mathrm {~N} + 1}$ 
B)  a) 35,215
b) $6 ^ { N } - 1$ 
C)  a) 6,37
b) $6 ^\mathrm {~N} + 1$ 
D)  a) 6,36
b) $6^{ \mathrm {~N} - 1}$ 
A)  a) 6,216
b) $6 ^{\mathrm {~N} + 1}$ 
B)  a) 35,215
b) $6 ^ { N } - 1$ 
C)  a) 6,37
b) $6 ^\mathrm {~N} + 1$ 
D)  a) 6,36
b) $6^{ \mathrm {~N} - 1}$

Question 14

On the October 15 billing date, Jacob had a balance due of $279.71 on his credit card. The transactions during the following month were: October 17 Payment $\$ 21.94$
October 30 Charge: groceries $\$ 60.23$
November 10 Charge: freezer $\quad \$ 297.02$ The interest rate on the card is 1.2% per month. Using the average daily balance method, find the
Balance due on November 15 (October has 31 days).

Accepted Answer

A) $618.97 
B) $619.89 
C) $619.08 
D) $619.07 
A) $618.97 
B) $619.89 
C) $619.08 
D) $619.07

Question 15

Solve the problem.
-The 2006 price of a certain type of car is $24,700. Estimate the price of the same car in the year 2020. Assume a constant annual inflation rate of 2.2%. Give a number of significant figures consistent
With the 2006 price given.

Accepted Answer

A) $34,837.17 
B) $33,497.28 
C) $32,307.60 
D) $32,157.39 
A) $34,837.17 
B) $33,497.28 
C) $32,307.60 
D) $32,157.39

Question 16

Use the Rule of 78 to find the amount of unearned interest for the loan paid in full before the date of maturity.
-Amount Financed: $12,250 Regular Monthly Payment: $232.75
Total Number of Payments scheduled: 60
Loan repaid in full instead of making: 36th payment

Accepted Answer

A) $267.42 
B) $281.15 
C) $253.03 
D) $323.32 
A) $267.42 
B) $281.15 
C) $253.03 
D) $323.32

Question 17

Use the actuarial method to find the payoff amount for the loan paid in full before its due date.
-Regular Monthly Payment: $314.78 APR: 12.7%
Remaining Payments After Payoff: 31

Accepted Answer

A) $8523.93 
B) $8596.84 
C) $8973.43 
D) $8658.68 
A) $8523.93 
B) $8596.84 
C) $8973.43 
D) $8658.68

Question 18

Solve the problem.
-Joe is buying some kitchen equipment for his new apartment. The total cost is $3700 and he places a down payment of $370. There is add-on interest of 9%. Find the total interest Joe will pay if it takes
Him 3 year(s)to pay for his purchase?

Accepted Answer

A) $89,910.00 
B) $899.10 
C) $299.70 
D) None of the above is correct. 
A) $89,910.00 
B) $899.10 
C) $299.70 
D) None of the above is correct.

Question 19

Suppose Bank of Grayslake offers a credit card charging 1.4% per month of one's average daily balance and no annual fee. The Bank of Gurnee offers a credit card charging 1.25% per month and
An annual fee of $X. What value of $X would make both cards the same if your average daily
Balance is usually $1200?

Accepted Answer

A) $23.80 
B) $1.80 
C) $4.90 
D) $21.60 
A) $23.80 
B) $1.80 
C) $4.90 
D) $21.60

Question 20

The given information applies to the day of investment in a mutual fund. Find the net asset value or number of shares
purchased as indicated.
-$$\begin{array} { l c c l } 
\hline \begin{array} { l } 
\text { Amount } \
\text { Invested }
\end{array} & \begin{array} { c } 
\text { Total Fund } \
\text { Assets }
\end{array} & \begin{array} { l } 
\text { Total Fund } \
\text { Liabilities }
\end{array} & \begin{array} { c } 
\text { Total Shares } \
\text { Outstanding }
\end{array} \
\hline 3400 & \$ 785 \text { million } & \$ 40 \text { million } & 70 \text { million } \
\hline
\end{array}$$ Find the number of shares purchased.

Accepted Answer

A) 319 
B) 351 
C) 303 
D) 49 
A) 319 
B) 351 
C) 303 
D) 49

Under what circumstances is the Average Daily Balance method a more favorable method to the borrower than the Unpaid Balance method? Explain.

Solve the problem. -The monthly payment on a(n)$71,000 loan at 12% annual interest is $785.26. What is the balance of principal after the first monthly payment?

Solve the problem. -For the given stock investment, find the total return: Number Purchase Price Dividend Sale Price Of Shares Per Share Per Share Per Share 100 $9.20 $2.72 $14.80

Find the future value of the deposit if the account pays simple interest. -$1800 at 3% for 5 years

Consider the first four levels of a pyramid scheme where "each one recruits six." a)If you are the top person in the chart, and each person's entry fee is $1, how much money will you receive and What will your profit be? b)What is the total number of members from level 1 through level 4?

Solve the problem. Use the Annual Percentage Rate Table if necessary. -Find the APR to the nearest half percent, for the following data.

Find the total return earned by the given bond. -

In a Ponzi scheme, where Ponzi promised investors a 50% profit within 45 days or a 100% profit within 90 days, how many investors would be required by the end of two and a quarter years with The same promised return?

Find the present value for the given future amount. Round to the nearest cent. -A = $12,400, 3 years r = 4% compounded annually

Solve the problem. -An item is purchased for $2000 with a down payment of $500. There is a finance charge of $100. Find the monthly payment if 24 payments are made.

Constance Hairston obtains a 25-year, $145,550 mortgage at 11.5% on a house selling for $171,000. Her monthly payment, including principal and interest, is $1479.47. How much of the total cost Will be interest?

Consider a pyramid scheme where "each one recruits six." a.How many members are in the second and third levels? b.In general, how many members are in level N?

Solve the problem. -The 2006 price of a certain type of car is $24,700. Estimate the price of the same car in the year 2020. Assume a constant annual inflation rate of 2.2%. Give a number of significant figures consistent With the 2006 price given.

Use the Rule of 78 to find the amount of unearned interest for the loan paid in full before the date of maturity. -Amount Financed: $12,250 Regular Monthly Payment: $232.75 Total Number of Payments scheduled: 60 Loan repaid in full instead of making: 36th payment

Use the actuarial method to find the payoff amount for the loan paid in full before its due date. -Regular Monthly Payment: $314.78 APR: 12.7% Remaining Payments After Payoff: 31

Solve the problem. -Joe is buying some kitchen equipment for his new apartment. The total cost is $3700 and he places a down payment of $370. There is add-on interest of 9%. Find the total interest Joe will pay if it takes Him 3 year(s)to pay for his purchase?

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

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Exam 13: Personal Financial Management