1. Find the simple interest on the
loan.
$1700 at 8%
for 10 years.
$ 1
2. Find the total amount due for the
simple interest loan.
$1600 at 6%
for 10 years.
3. Find the interest rate on a loan
charging $765 simple interest on a principal of $3750 after 6 years.
1 %
4. Find the term of a loan of $175 at 4.5% if the
simple interest is $63.
1 yr
5.Determine the amount due on the
compound interest loan. (Round your answers to the nearest cent.)
$14,000 at 4%
for 15 years if the interest is compounded in
the following ways.
(a) annually
$ 1
(b) quarterly
$ 2
6.Calculate the present value of the
compound interest loan. (Round your answers to the nearest cent.)
$29,000 after 7
years at 3% if the interest is compounded in the
following ways.
(a) annually
$ 1
(b)
(b) quarterly
$ 2
7.Find the term of the compound
interest loan. (Round your answer to two decimal places.)
3.9% compounded quarterly to obtain $8600 from a principal of $2000.
1 yr
8.
Use the “rule of 72” to estimate the doubling time (in years) for the
interest rate, and then calculate it exactly. (Round your answers to two
decimal places.)
4% compounded annually.
|
“rule of |
1 |
|
exact |
2 |
9.Find the effective rate of the
compound interest rate or investment. (Round your answer to two decimal
places.)
20% compounded monthly. [Note:
This rate is a typical credit card interest rate, often stated as 1.7% per month.]
1 %
10. Since 2007, a particular fund
returned 13.9% compounded monthly. How much
would a $6000 investment in this fund have been
worth after 4 years? (Round your answer to the
nearest cent.)
$ 1
11.In
the following ordinary annuity, the interest is compounded with each payment,
and the payment is made at the end of the compounding period.
Find the accumulated amount of the annuity. (Round your answer to the nearest
cent.)
$1500 annually at 7% for 10 years.
$
1
12.In the following ordinary annuity,
the interest is compounded with each payment, and the payment is made at the
end of the compounding period.
Find the required payment for the sinking fund. (Round your answer to the
nearest cent.)
Monthly deposits earning 5% to accumulate $3000
after 10 years.
13.
In the following ordinary annuity, the interest is compounded with each
payment, and the payment is made at the end of the compounding period.
Find the amount of time needed for the sinking fund to reach the given
accumulated amount. (Round your answer to two decimal places.)
$4500 yearly at 6%
to accumulate $100,000.
14.
In the following ordinary annuity, the interest is compounded with each
payment, and the payment is made at the end of the compounding period.
An individual retirement account, or IRA, earns tax-deferred interest and
allows the owner to invest up to $5000 each year. Joe and Jill both will make
IRA deposits for 30 years (from age 35 to 65) into stock mutual funds yielding 9.3%. Joe deposits $5000 once each year, while Jill
has $96.15 (which is 5000/52) withheld from her weekly paycheck and deposited
automatically. How much will each have at age 65? (Round your answer to the
nearest cent.)
|
Joe |
$ 1 |
|
|
Jill |
$ 2 |
|
|
15. In the following ordinary How much must you invest each month in a mutual fund yielding 13.9% compounded monthly to become a millionaire in |
16.
Calculate the present value of the annuity. (Round your answer to the nearest
cent.)
$13,000 annually at 7% for 10 years.
$ 1
17.
Determine the payment to amortize the debt. (Round your answer to the nearest
cent.)
Monthly payments on $130,000 at 4% for 25
years.
$ 1
18. Determine the payment to
amortize the debt. (Round your answer to the nearest cent.)
Quarterly payments on $19,500 at 3.9% for 6
years.
$ 1
19.
Find the unpaid balance on the debt. (Round your answer to the nearest cent.)
After 6
years of monthly payments on $140,000 at 4% for 25 years.
$ 1
20. The
super prize in a contest is $10 million. This prize will be paid out in equal
yearly payments over the next 10 years. If the
prize money is guaranteed by AAA bonds yielding 6%
and is placed into an escrow account when the contest is announced 1 year
before the first payment, how much do the contest sponsors have to deposit in
the escrow account? (Round your answer to the nearest cent.)
$1
