Question 1

The number of periods for a table lookup on $5,000 at 12% compounded semiannually for 10 years is 10 periods.

Accepted Answer

A) True 
 B)False

Question 2

Complete without using table:
 $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline \text { Principal } & \text { Time } & \begin{array} { l } 
\text { Rate of } \
\text { Compound }
\end{array} & \begin{array} { l } 
\text { When } \
\text { Compounded }
\end{array} & \begin{array} { l } 
\text { \# of Periods to be } \
\text { Compounded }
\end{array} & \begin{array} { l } 
\text { Total } \
\text { Amount }
\end{array} & \begin{array} { l } 
\text { Total } \
\text { Interest }
\end{array} \
\hline \$ 1,500 & 1 \text { year } & 12 \% & \text { Quarterly } & \text { A } & \text { B } & \text { C } \
\hline
\end{array}$$

Accepted Answer

A. 4; B. $

Question 3

Using the table in handbook, the value of $60 deposited in a bank for six years at a rate of 10% compounded annually is:

Accepted Answer

A) $96.63 
B) $96.36 
C) $106.30 
D) $106.03 
E) None of these 
A) $96.63 
B) $96.36 
C) $106.30 
D) $106.03 
E) None of these

Question 4

Ellen deposits $6,773 into an account earning 1% annually. After seven years what will Ellen's balance have grown to, including interest?

Accepted Answer

A) $7,516.68 
B) $7,516.88 
C) $7,261.33 
D) $6,836.78 
E) None of these 
A) $7,516.68 
B) $7,516.88 
C) $7,261.33 
D) $6,836.78 
E) None of these

Question 5

John Riviera deposits $14,000 in National Bank at 8% compounded quarterly. What is the effective rate (APY)of interest? (round answer to nearest hundredth)

Accepted Answer

$14,000 × 1.0824 = $

Question 6

Use the present value table to complete:
 $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline\text { Future } & & & & & & \ 
\text { Amount } & \text { Length of } & \text { Rate } & \text { Table } & \text { Rate } & \text { P.V. } & \text { P.V. } \
 \text { Desired } & \text { Time } & \text { Compounded } & \text { Periods } & \text { Used } & \text { Factor } & \text { Amount } \
\hline \$ 8,000 & 10 \text { yrs } & 8 \% \text { semiannual } & \text { A } & \text { B } & \text { C } & \text { D } \
\hline
\end{array}$$

Accepted Answer

A. 20; B.

Question 7

Compound value = $ amount divided by table factor.

Accepted Answer

A) True 
 B)False

Question 8

Jim Ring wants to attend Northeast College. He will need $20,000 four years from today. If Jim's bank pays 8% compounded quarterly, what must he deposit today so that he will have the $20,000 in the future? Check your answer by use of the compound table value.

Accepted Answer

$20,000 × .7284 = $1

Question 9

Match the following terms with their definitions.
-Quarterly

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

Solve by using compound table. Find future value.
 $$\begin{array} { | l | l | l | l | l | } 
\hline \text { Principal } & \text { Rate } & \text { Time } & \text { \#times Compounded per year } & \text { Future } \
\hline \$ 18,000 & 12 \% & \text { 4 years } & \text { Semiannually } & ? \
\hline
\end{array}$$

Accepted Answer

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

Question 11

Moxie Fox deposited $30,000 in a savings account at 6% interest compounded semiannually. At the beginning of year 4, Moxie deposits an additional $60,000 at 6% interest compounded semiannually. At the end of six years, what is the balance in Moxie's account?

Accepted Answer

3% 6 periods $30,000

Question 12

The rate for a table lookup on a $4,000, 12% investment compounded quarterly for four years is 4%.

Accepted Answer

A) True 
 B)False

Question 13

Interest calculated on a balance every three months is said to be compounded quarterly.

Accepted Answer

A) True 
 B)False

Question 14

$14,182 is the present value of $21,000 that earns at a bank 12% compounded quarterly for four years. (Use table in handbook.)

Accepted Answer

A) True 
 B)False

Question 15

Jarad Rodriguez deposits $10,000 at 10% compounded semiannually. At the start of year 6, Jarad deposits an additional $5,000 that is compounded at the same rate. At the end of 10 years, what is the balance in Jarad's account?

Accepted Answer

10 periods 5%; $10,0

Question 16

Match the following terms with their definitions.
-Interest

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 17

Jackie wants to purchase a lakeside condo in Cuba, Missouri, in 20 years. Jackie will invest in a mutual fund earning 8% compounded semiannually. How much will she need to deposit today in that fund to purchase her $100,000 lakeside condo?

Accepted Answer

8% / 2 = 4%, 20 × 2

Question 18

Find effective rate (APY)and show work: (round to nearest hundredth)
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Principal } & \text { Rate } & \text { \#times Compounded per year } & \text { Effective Rate (APY) } \
\hline \$8,000 & 12 \% & \text { Semiannually } & ?\
\hline
\end{array}$$

Accepted Answer

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

Question 19

Mel Ross thinks he would like to buy a used car in five years for $8,000. He wants to put the money aside now so that in five years the $8,000 will be available. His bank offers him 12% interest, compounded semiannually. Could you calculate what Mel must invest today?

Accepted Answer

$8,000 × .

Question 20

Ryan deposits $12,000 into a fixed asset account that earns 6% compounded quarterly. What is Ryan's balance at the end of five years?

Accepted Answer

6% / 4 = 1.5%, 5 × 4

Exam 12: Compound Interest and Present Value

The number of periods for a table lookup on $5,000 at 12% compounded semiannually for 10 years is 10 periods.

Complete without using table: Principal Time Rate of Compound When Compounded \# of Periods to be Compounded Total Amount Total Interest \ 1,500 1 year 12\% Quarterly A B C

Using the table in handbook, the value of $60 deposited in a bank for six years at a rate of 10% compounded annually is:

Ellen deposits $6,773 into an account earning 1% annually. After seven years what will Ellen's balance have grown to, including interest?

John Riviera deposits $14,000 in National Bank at 8% compounded quarterly. What is the effective rate (APY)of interest? (round answer to nearest hundredth)

Use the present value table to complete: Future Amount Length of Rate Table Rate P.V. P.V. Desired Time Compounded Periods Used Factor Amount \ 8,000 10 yrs 8\% semiannual A B C D

Compound value = $ amount divided by table factor.

Jim Ring wants to attend Northeast College. He will need $20,000 four years from today. If Jim's bank pays 8% compounded quarterly, what must he deposit today so that he will have the $20,000 in the future? Check your answer by use of the compound table value.

Match the following terms with their definitions. -Quarterly

Solve by using compound table. Find future value. Principal Rate Time \#times Compounded per year Future \ 18,000 12\% 4 years Semiannually ?

Moxie Fox deposited $30,000 in a savings account at 6% interest compounded semiannually. At the beginning of year 4, Moxie deposits an additional $60,000 at 6% interest compounded semiannually. At the end of six years, what is the balance in Moxie's account?

The rate for a table lookup on a $4,000, 12% investment compounded quarterly for four years is 4%.

Interest calculated on a balance every three months is said to be compounded quarterly.

$14,182 is the present value of $21,000 that earns at a bank 12% compounded quarterly for four years. (Use table in handbook.)

Jarad Rodriguez deposits $10,000 at 10% compounded semiannually. At the start of year 6, Jarad deposits an additional $5,000 that is compounded at the same rate. At the end of 10 years, what is the balance in Jarad's account?

Match the following terms with their definitions. -Interest

Jackie wants to purchase a lakeside condo in Cuba, Missouri, in 20 years. Jackie will invest in a mutual fund earning 8% compounded semiannually. How much will she need to deposit today in that fund to purchase her $100,000 lakeside condo?

Find effective rate (APY)and show work: (round to nearest hundredth) Principal Rate \#times Compounded per year Effective Rate (APY) \8 ,000 12\% Semiannually ?

Mel Ross thinks he would like to buy a used car in five years for $8,000. He wants to put the money aside now so that in five years the $8,000 will be available. His bank offers him 12% interest, compounded semiannually. Could you calculate what Mel must invest today?

Ryan deposits $12,000 into a fixed asset account that earns 6% compounded quarterly. What is Ryan's balance at the end of five years?

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