Exam 10: Compound Interest and Inflation

Solve the problem. -Barbara knows that she will need to buy a new car in 5 years. The car will cost $15,000 by then. How much should she invest now at 4%, compounded quarterly, so that she will have enough to buy a new car?

Use the table to solve the problem. Round to the nearest cent. -Jenny Sherrer has $29,000 to invest and believes that she will earn 8% compounded semiannually. Find the compound amounts if she invests for 4 years and for 8 years. Then find the additional amount earned due to the longer period.

Find the interest earned. Assume interest compounded daily, as in the following table, and use the exact number of days. Round to the nearest cent. -Amount: $4,070 Deposited: Sept 27 Withdrawn: Nov 10

Use values from the compound interest table to find the compound amount. Round to the nearest cent. -$8,000 at 8% compounded annually for 8 years

Find the compound amount for the certificate of deposit. Assume daily compounding using the following table. Round to the nearest cent. -Amount: $8,400 Rate: 5% Years: 5

Find the present value. Round to the nearest cent. -

Use values from the compound interest table to find the compound amount. Round to the nearest cent. -$200 at 6% compounded annually for 15 years

Find the present value. Round to the nearest cent. -

Use values from the compound interest table to find the compound interest. Round to the nearest cent. -$17,000 at 8% compounded semiannually for 6 years

Use the table to solve the problem. Round to the nearest cent. -Lexi can invest $7,330 for 3 years at 8% compounded quarterly. Find the future value.

Use values from the compound interest table to find the compound interest. Round to the nearest cent. -$2,450 at 8% compounded semiannually for 6 years

Provide an appropriate response. -Explain the difference between time deposit accounts and passbook accounts.

Solve the problem. -Southwest Dry Cleaners believes that it will need new equipment in 9 years. The equipment will cost $26,000. What lump sum should be invested today at 5% compounded semiannually, to yield $26,000?

Find the simple interest for the period indicated. Then use table values to find the compound interest. Finally, find the difference between compound interest and simple interest. Round to the nearest cent. (Interest is compounded annually.) -Principal: $5,929 Rate: 5% Years: 14

Use values from the compound interest table to find the compound amount. Round to the nearest cent. -$700 at 4% compounded quarterly for 5 years

Use values from the compound interest table to find the compound amount. Round to the nearest cent. -$7,670 at 8% compounded semiannually for 12 years

Find the simple interest for the period indicated. Then use table values to find the compound interest. Finally, find the difference between compound interest and simple interest. Round to the nearest cent. (Interest is compounded annually.) -Principal: $790 Rate: 6% Years: 16

Solve the problem. -An investment of $13,335 earns 12% interest compounded monthly for 2 years. (a)What is the future value of the investment? (Use the compound interest table.)(b)If money can be deposited at 6% compounded quarterly, find the present value of the investment.

Use the table to solve the problem. Round to the nearest cent. -Universal Bank lends $4,300,000 for years at 8% compounded quarterly to Shining Shores Development Company to fund the building of a condominium complex. Find the future value.

Use the table to solve the problem. Round to the nearest cent. -John Lee's savings account has a balance of $282. After 9 years, what will the amount of interest be at 5% compounded semiannually?