Question 1

Solve by using compound table. Find future value.
 $$\begin{array} { | l | l | l | l | l | } 
\hline & & & & \text { Future } \
\text { Principal } & \text { Rate } & \text { Time } & \text { \# times Compounded per year } & \text { Value } \
\hline \$ 2,000 & 8 \% & \text { 2 years } & \text { Quarterly } & \text { ? } \
\hline
\end{array}$$

Accepted Answer

The answer of Solve by using compound table. Find future...

Question 2

Find effective rate (APY)and show work: (round to nearest hundredth)
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Principal } & \text { Rate } & \text { \#times Compounded per year } & \text { Effective Rate (APY) } \
\hline \$ , 500 & 10 \% & \text { Semiannually } & ?\
\hline
\end{array}$$

Accepted Answer

The answer of Find effective rate (APY)and show work: (round...

Question 3

Effective rates can be seen in the compounding table for one dollar.

Accepted Answer

A) True 
 B)False

Question 4

Al Safe deposited $15,000 at Q Bank at an interest rate of 16%, compounded quarterly. What was the effective rate (APY)? (round to nearest hundredth)

Accepted Answer

16% / 4 = 4%, 4 periods; 1.169

Question 5

Jim Smith believes that in 30 years he will need $80,000 to buy a retirement cottage. Assuming he gets an interest rate of 9% compounded annually, how much will he have to invest today to reach his retirement goal?

Accepted Answer

$80,000 ×

Question 6

$20,000 for 14 years compounded at 8% semiannually results in how many periods?

Accepted Answer

A) 64 
B) 28 
C) 12 
D) 14 
E) None of these 
A) 64 
B) 28 
C) 12 
D) 14 
E) None of these

Question 7

Annual means compounded once a year.

Accepted Answer

A) True 
 B)False

Question 8

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

Question 9

Match the following terms with their definitions.
-Present value

Accepted Answer

A) Year times number of times compounded in one year 
B) Twice a year 
C) Stated rate 
D) True rate of interest 
E) Amount calculated on adjusted principal
F)Periodically interest is calculated and added to principal
G)Rate divided by number of times compounded per year
H)Know future amount looking for present
I)Four times per year
J)Twelve times per year 
A) Year times number of times compounded in one year 
B) Twice a year 
C) Stated rate 
D) True rate of interest 
E) Amount calculated on adjusted principal
F)Periodically interest is calculated and added to principal
G)Rate divided by number of times compounded per year
H)Know future amount looking for present
I)Four times per year
J)Twelve times per year

Question 10

Compounding looks into the present when we know what we have in the future.

Accepted Answer

A) True 
 B)False

Question 11

Joe Diamond deposited $9,000 into the Rong Bank, which pays 12% interest, compounded quarterly. Calculate the amount Joe will have in his account at the end of four years.

Accepted Answer

$9,000 × 1

Question 12

Using the table in the handbook, the table factor for compounding $4,000 at 9% compounded annually for one year is 1.0900.

Accepted Answer

A) True 
 B)False

Question 13

Merle Fonda opened a new savings account. She deposited $40,000 at 10% compounded semiannually. At the start of the fourth year, Merle deposits an additional $20,000 that is also compounded semiannually at 10%. At the end of six years, the balance in Merle's account is (use the tables in the handbook):

Accepted Answer

A) $73,604.00 
B) $53,604.00 
C) $80,406.00 
D) $98,636.72 
E) None of these 
A) $73,604.00 
B) $53,604.00 
C) $80,406.00 
D) $98,636.72 
E) None of these

Question 14

Find effective rate (APY)and show work: (round answer to the nearest hundredth)
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Principal } & \text { Rate } & \begin{array} { l } 
\text { When } \
\text { Compounded }
\end{array} & \begin{array} { l } 
\text { Effective Rate } \
\text { (APY) }
\end{array} \
\hline \$ 5,000 & 10 \% & \text { Semiannually } & \text { ? } \
\hline
\end{array}$$

Accepted Answer

The answer of Find effective rate (APY)and show work: (round...

Question 15

Al Miler, the owner of Al's Garage, estimates that he will need $29,000 for new equipment in 15 years. Al decides that he will put aside the money now so that in 15 years the $29,000 will be available. His bank offers him 10% interest compounded semiannually. (Use the tables in the handbook.)Al must invest today:

Accepted Answer

A) $6,710.60 
B) $6,942.60 
C) $6,701.60 
D) $125,335.10 
E) None of these 
A) $6,710.60 
B) $6,942.60 
C) $6,701.60 
D) $125,335.10 
E) None of these

Question 16

Don Williams wants to buy a boat five years from today. He will need $40,000. Don wants you to calculate how much he needs today to put in the bank (10% compounded semiannually)to reach his goal in the future.

Accepted Answer

10 periods

Question 17

The compound table can be used to prove a present value calculation.

Accepted Answer

A) True 
 B)False

Question 18

Lisa Richter deposited $5,000 at 4% compounded semiannually for three years. At the beginning of the fourth year, Lisa deposited $2,500. What would her balance be at the end of five years assuming she is still earning 4% compounded semiannually?

Accepted Answer

A) $5,131 
B) $8,131 
C) $8,800 
D) $8,800.99 
E) None of these 
A) $5,131 
B) $8,131 
C) $8,800 
D) $8,800.99 
E) None of these

Question 19

Match the following terms with their definitions.
-Rate

Accepted Answer

A) Year times number of times compounded in one year 
B) Twice a year 
C) Stated rate 
D) True rate of interest 
E) Amount calculated on adjusted principal
F)Periodically interest is calculated and added to principal
G)Rate divided by number of times compounded per year
H)Know future amount looking for present
I)Four times per year
J)Twelve times per year 
A) Year times number of times compounded in one year 
B) Twice a year 
C) Stated rate 
D) True rate of interest 
E) Amount calculated on adjusted principal
F)Periodically interest is calculated and added to principal
G)Rate divided by number of times compounded per year
H)Know future amount looking for present
I)Four times per year
J)Twelve times per year

Question 20

Marcia Gadzera wants to retire in San Diego when she is 65 years old. Marcia is now 50 and believes she will need $900,000 to retire comfortably. To date, she has set aside no retirement money. If she gets interest of 10% compounded semiannually, how much must she invest today to meet her goal of $900,000?

Accepted Answer

$900,000 ×

Solve by using compound table. Find future value. Future Principal Rate Time \# times Compounded per year Value \ 2,000 8\% 2 years Quarterly ?

Find effective rate (APY)and show work: (round to nearest hundredth) Principal Rate \#times Compounded per year Effective Rate (APY) \ ,500 10\% Semiannually ?

Effective rates can be seen in the compounding table for one dollar.

Al Safe deposited $15,000 at Q Bank at an interest rate of 16%, compounded quarterly. What was the effective rate (APY)? (round to nearest hundredth)

Jim Smith believes that in 30 years he will need $80,000 to buy a retirement cottage. Assuming he gets an interest rate of 9% compounded annually, how much will he have to invest today to reach his retirement goal?

$20,000 for 14 years compounded at 8% semiannually results in how many periods?

Annual means compounded once a year.

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

Match the following terms with their definitions. -Present value

Compounding looks into the present when we know what we have in the future.

Joe Diamond deposited $9,000 into the Rong Bank, which pays 12% interest, compounded quarterly. Calculate the amount Joe will have in his account at the end of four years.

Using the table in the handbook, the table factor for compounding $4,000 at 9% compounded annually for one year is 1.0900.

Find effective rate (APY)and show work: (round answer to the nearest hundredth) Principal Rate When Compounded Effective Rate (APY) \ 5,000 10\% Semiannually ?

Don Williams wants to buy a boat five years from today. He will need $40,000. Don wants you to calculate how much he needs today to put in the bank (10% compounded semiannually)to reach his goal in the future.

The compound table can be used to prove a present value calculation.

Lisa Richter deposited $5,000 at 4% compounded semiannually for three years. At the beginning of the fourth year, Lisa deposited $2,500. What would her balance be at the end of five years assuming she is still earning 4% compounded semiannually?

Match the following terms with their definitions. -Rate

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

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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

Life, Fire, and Auto Insurance

Stocks, Bonds, and Mutual Funds

Business Statistics

Filters

Exam 12: Compound Interest and Present Value

Solve by using compound table. Find future value. Future Principal Rate Time \# times Compounded per year Value \ 2,000 8\% 2 years Quarterly ?

Find effective rate (APY)and show work: (round to nearest hundredth) Principal Rate \#times Compounded per year Effective Rate (APY) \ ,500 10\% Semiannually ?

Effective rates can be seen in the compounding table for one dollar.

Al Safe deposited $15,000 at Q Bank at an interest rate of 16%, compounded quarterly. What was the effective rate (APY)? (round to nearest hundredth)

Jim Smith believes that in 30 years he will need $80,000 to buy a retirement cottage. Assuming he gets an interest rate of 9% compounded annually, how much will he have to invest today to reach his retirement goal?

$20,000 for 14 years compounded at 8% semiannually results in how many periods?

Annual means compounded once a year.

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

Match the following terms with their definitions. -Present value

Compounding looks into the present when we know what we have in the future.

Joe Diamond deposited $9,000 into the Rong Bank, which pays 12% interest, compounded quarterly. Calculate the amount Joe will have in his account at the end of four years.

Using the table in the handbook, the table factor for compounding $4,000 at 9% compounded annually for one year is 1.0900.

Find effective rate (APY)and show work: (round answer to the nearest hundredth) Principal Rate When Compounded Effective Rate (APY) \ 5,000 10\% Semiannually ?

Don Williams wants to buy a boat five years from today. He will need $40,000. Don wants you to calculate how much he needs today to put in the bank (10% compounded semiannually)to reach his goal in the future.

The compound table can be used to prove a present value calculation.

Lisa Richter deposited $5,000 at 4% compounded semiannually for three years. At the beginning of the fourth year, Lisa deposited $2,500. What would her balance be at the end of five years assuming she is still earning 4% compounded semiannually?

Match the following terms with their definitions. -Rate

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

Life, Fire, and Auto Insurance

Stocks, Bonds, and Mutual Funds

Business Statistics

Filters