1. Nestor borrows $10,000 from the shady loan shark, Mr. Wildcat. Mr. Wildcat tells him he mustrepay the loan in 1 month and pay an additional $1000 in interest. If Mr. Wildcat is chargingsimple interest on his loan, what is the annual interest rate?
Topic: Compound Interest
1. LaDonna uses $25,000 to purchase a 25 month CD that pays 2.47% compoundedmonthly.
a. What is her investment worth at the end of 25 months?
b. How much interest did she earn?
Topic: Consumer Loans
The table below shows the activity on Zuliemia's credit card for the month of August. Shestarted the month with a balance of $342.25, and her credit card charges 18.5% interest. Usethe Average Daily Balance method to calculate her finance charges for the month of August.
|
Date
|
Activity
|
Amount
|
|
August 5
|
Payment
|
$200.00
|
|
August 15
|
Charge - gas
|
$26.37
|
|
August 22
|
Charge - Macy's
|
$105.42
|
|
August 25
|
Charge - coffee
|
$4.24
|
Topic: Annuities
1. Mr. Sparky puts away $250 from each monthly paycheck into an account that returns 7.89%annual interest compounded monthly for his retirement.
a. How much will Mr. Sparky have saved up in his account if he makes these deposits for20 years?
b. When he retires, he plans to live on the interest he earns each month. How much ininterest will he earn each month? (assume he can get the same interest rate as in part a)