1. Cristiana uses $25,000 to purchase a 25 month CD (certificate of deposit) that pays 2.47% compounded monthly.
a. What is her investment worth at the end of 25 months?
b. How much interest did she earn?
2.Raul and Josephine buy a plasma TV from Sparky's Electronics on an installment plan (simple interest add on loan). They will pay the TV off in 3 years, paying 19.25% interest.
a. If the TV costs $1299.00, what will their monthly payments be?
b. If they make an $800 down payment up front, what will their payments be?
3. Meagan invests $1,200 each year in an IRA for 12 years in an account that earned 5% compounded annually. At the end of 12 years, she stopped making payments to the account, but continued to invest her accumulated amount at 5% compounded annually for the next 11 years.
a. What was the value of the Ira at the end of 12 years?
b. What was the value of the investment at the end of the next 11 years?
c. How much interest did she earn?
4. Mike wants to buy a new Dodge Charger. He is able to negotiate a price of $21,500 for the color and options he wanted. He can secure a 48 month car loan at 6.8% if he can make a down payment of 20% of the price.
a. How much are his car payments?
b. At the end of 20 months, Mike gets a bonus from work, and he decides to pay off his car loan. How much does he owe after 20 months?