Assignment:
Question 1 Find the simple interest on a $400 investment made for 5 years at an interest rate of 7%/year. What is the accumulated amount?
A. The simple interest is $140, the accumulated amount is $540.
B. The simple interest is $115, the accumulated amount is $515.
C. The simple interest is $120, the accumulated amount is $520.
D. The simple interest is $125, the accumulated amount is $555.
Question 2 If the accumulated amount is $3,720 at the end of 3 years and the simple rate of interest is 8%/year, what is the principal?
A. The principal is $3,500.
B. The principal is $3,360.
C. The principal is $3,000.
D. The principal is $3,200.
Question 3 Find the accumulated amount A if the principal P = $2,000 is invested at the interest rate of r = 6% per year for t = 6 years, compounded annually.
A. The accumulated amount is $3,508.28.
B. The accumulated amount is $3,194.16.
C. The accumulated amount is $2,837.04.
D. The accumulated amount is $2,708.89.
Question 4 Find the accumulated amount A if the principal P = $11,000 is invested at the interest rate of r = 5% per year for t = 5.5 years, compounded quarterly.
A. The accumulated amount is $14,585.32.
B. The accumulated amount is $13,785.93.
C. The accumulated amount is $14,100.05.
D. The accumulated amount is $14,457.17.
Question 5 Determine the simple interest rate at which $1,500 will grow to $1,550 in the 8 months. Round your answers to the nearest tenth of percent.
A. The interest rate is 5%/year.
B. The interest rate is 4.33%/year.
C. The interest rate is 4.76%/year.
D. The interest rate is 66.67%/year.
E. The interest rate is 3.06%/year.
Question 6 Find the present value of $40,000 due in 4 years at the given rate of interest 8%/year compounded monthly.
A. The present value is $28,948.67.
B. The present value is $29,433.94.
C. The present value is $29,076.82.
D. The present value is $29,748.06.
Question 7 In order to help finance the purchase of a new house, the Abdullahs have decided to apply for a short-term loan (a bridge loan) in the amount of $140,000 for a term of 1 mo. If the bank charges simple interest at the rate of 12%/year, how much will the Abdullahs owe the bank at the end of the term?
A. $141,400
B. $140,012
C. $146,800
D. $144,900
Question 8 The Kwans are planning to buy a house 6 years from now. Housing experts in their area have estimated that the cost of a home will increase at a rate of 6%/year during that period. If this economic prediction holds true, how much can the Kwans expect to pay for a house that currently costs $160,000?
A. $218,199
B. $221,562
C. $230,490
D. $226,963
Question 9 The manager of a money market fund has invested $4.2 million in certificates of deposit that pay interest at the rate of 5.4%/year compounded quarterly over a period of 5 years. How much will the investment be worth at the end of 5 years?
A. 5,491,921.88
B. 3,211,990.34
C. 1,291,921.88
D. 12,024,347.20
Question 10 Find the effective rate corresponding to nominal rate 6% / year compounded monthly. Round the answers to the nearest hundredth of percent.
A. 6.538%
B. 5.858%
C. 6.598%
D. 6.168%
Question 11 Find the interest rate needed for an investment of $4,000 to grow to an amount of $5,000 in 4 yr if interest is compounded continuously. Please round the answer to the nearest hundredth of percent.
A. 5.58 %/yr
B. 5.70 %/yr
C. 6.63 %/yr
D. 5.01 %/yr
E. 5.92 %/yr
Question 12 Anthony invested a sum of money 6 yr ago in a savings account that has since paid interest at the rate of 7%/year compounded quarterly. His investment is now worth $19,713.77. How much did he originally invest? Please round the answer to the nearest cent.
A. $13,000.01
B. $12,500.01
C. $14,000.01
D. $11,500.01
E. $11,000.01
Question 13 Georgia purchased a house in 1998 for $220,000. In 2003 she sold the house and made a net profit of $50,000. Find the effective annual rate of return on her investment over the 5-yr period. Please round the answer to the nearest tenth of percent.
A. 3.7%/yr
B. 3.1%/yr
C. 4.4%/yr
D. 4.2%/yr
E. 5.6%/yr
Question 14 Find the amount of an ordinary annuity of 10 yearly payments of $1,800 that earn interest at 10% per year, compounded annually.
A. $4,668.74
B. $28,687.36
C. $87,798.04
D. $3,600.00
Question 15 Robin, who is self-employed, contributes $4,000/year into a Keogh account. How much will he have in the account after 15 years if the account earns interest at the rate of 6.5%/year compounded yearly?
A. $96,728.68
B. $10,287.36
C. $158,267.14
D. $3,771.28
Question 16 If a merchant deposits $1,500 annually at the end of each tax year in an IRA account paying interest at the rate of 10%/year compounded annually, how much will she have in her account at the end of 25 years? Round your answer to two decimal places.
A. $16,252.06
B. $147,520.59
C. $5,250.00
D. $34,663.65
Question 17 Find the present value of an ordinary annuity of $600 payments each made quarterly over 5 years and earning interest at 4% per year compounded quarterly.
A. $8,154.20
B. $2,671.09
C. $10,827.33
D. $56,916.87
Question 18 Juan invested $24,000 in a mutual fund 5 years ago. Today his investment is worth $34,616. Find the effective annual rate of return on his investment over the 5-year period.
A. 10.3%/year
B. 8%/year
C. 83%/year
D. 8.3%/year
Question 19 Find the amount of an ordinary annuity for 5 years of quarterly payments of $2,200 that earn interest at 4% per year compounded quarterly.
A. $11,222.21
B. $65,511.77
C. $48,441.81
D. $2,684.42
Question 20 Find the present value of the ordinary annuity. Please round the answer to the nearest cent.$2,000 per semiannual period for 7 yr at 12%/year compounded semiannually
A. P = $18,589.97
B. P = $17,913.54
C. P = $20,003.52
D. P = $13,147.80
E. P = $9,629.07