Simple & Compound Interest Questions and Answers

8 Ben Dover buys a car for 19 500 The average annual depreciation on this model is 13 How long will it be before the car is worth only 2000

English Subject a Find the number of teaching positions that should be apportioned to each department in the fall using Jefferson s Method History Liberal Arts Math English Subject Standard Quota History Liberal Arts Math English 14200 3898 Lower Quota Standard Quota Modified New Lower Quota Quota if needed 14200 3938 b Find the number of teaching positions that should be apportioned to each department in the fall using Hamilton s Method Lower Quota Additional based on decimals Modified Quota if needed New Lower Quota Final allocation

Question 10 of 20 Linkin Corporation is considering purchasing a new delivery truck T not the least of which is that it runs The new truck would cost 57 costs and increased fuel economy the new truck is expected to gene will sell the truck for an estimated 28 100 Traditionally the compar unless it has a payback period that is less than 50 of the asset s est that the company should not rely solely on the payback approach bu evaluating new projects The company s cost of capital is 8 a Click here to view the factor table Compute the cash payback period and net present value of the prop negative sign preceding the number eg 45 or parentheses eg 45 Round for Payback period to 1 decimal place e g 10 5 For calculation purposes

Twins graduate from college together and start their careers Twin 1 invests 2000 at the end of each year for 10 years only until age 33 in an account that earns 6 compounded annually Suppose that twin 2 waits until turning 40 to begin Investing How much must twin 2 put aside at the end of each year for the next 25 years in an account that earns 6 compounded annually in order to have the same amount as twin 1 at the end of these 25 years when they turn 65 Round your answer to the nearest cent

Suppose a recent college graduate s first job allows her to deposit 200 at the end of each month in a savings plan that earns 9 compounded monthly This savings plan continues for 5 years before new obligations make it impossible to continue If the accrued amount remains in the plan for the next 15 years without deposits or withdrawals how much money will be in the account 20 years after the plan began Round your answer to the neprest cent

Find the future value of an ordinary annuity of 1 000 paid quarterly for 5 years if the interest rate is 7 compounded quarterly Round your answer to the nearest cent

What is the size of the payments that must be deposited at the beginning of each 6 month period in an account that pays 9 4 compounded semiannually so that the account will have a future val of 190 000 at the end of 13 years Round your answer to the nearest cent

PRACTICE ANOTHER If 9000 is deposited at the end of each half year in an account that earns 6 4 compounded semiannually after how many half years will the account contain 180 000 Round your answer UP to the nearest half year half years Nondi NOTES

If 3500 is deposited at the end of each quarter in an account that earns 8 compounded quarterly after how many quarters will the account contain 100 000 Round your answer UP to quarter quarters

MY NOTES PRACTICE ANOTHER Suppose a recent college graduate s first job allows her to deposit 200 at the end of each month in a savings plan that earns 12 compounded monthly This savings plan continues for 14 years before new obligations make it impossible to continue How much money has accrued in the account at the end of the 14 years Round your answer to the nearest cent If the accrued amount remains in the plan for the next 15 years without deposits or withdrawals how much money will be in the account 29 years after the plan began Round your answer to the nearest cent

The Weldmans want to save 50 000 in 3 years for a down payment on a house If they make monthly deposits in an account paying 12 compounded monthly what is the size of the payments th are required to meet their goal Round your answer to the nearest cent

189 The Levchenko family invested 10 000 in the stock market How much was their investment worth after 10 years if the average rate of return during this time was 5 and they invested 1 000 each year for the 10 year period Round answe to the nearest dollar lect one O 12 801 O 12 578 O 12 461 O 12 357

uppose you want to purchase a 340 000 home and you have the required 57 000 down payment in savings Complete the table below for a mortgage option presented by a mortgage brea Payment Total of Payments over Life of Loan Principal Interest Rate 292 000 4 500 Complete the table below Terms years 20 Interest Terms Rate years 20 Principal 292 000 4 500 Round to the nearest cent as needed Payment Total of Payments over Life of Loan Total Interest Paid over Life of Loan Total Interest Paid over Life of Loan GTID

Jared was supposed to make a payment of 2 000 in 2 years and another payment for 900 in 4 years to Loon Company as part of a payment plan Instead she is trying to reach an agreement with the company where she would pay an upfront amount now and an amount of 1 200 in 4 years Assume that money is worth 8 64 compounded quarterly a Calculate the equivalent value of the 2 000 payment and the 900 payment today

1 National Bank offers a 10 000 certificate of deposit at 5 755 compounded monthly

Dorothy divided 14 500 among two accounts paying 11 and 8 interest annually The interest earned after 1 year in the 8 account was 455 less than that earned in the 11 account How much money was invested in each account

se the sales of a particular brand of 8 120 8 360

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erome is contemplating the purchase of 100 shares of a stock selling for 19 per share The stock pays no dividends The mistory of the stock indicates that it should grow at an annual rate of 13 per year Use annual compounding to determine mow much the 100 shares of stock will be worth in 7 years The 100 shares will be worth in 7 years Round to the nearest cent as needed

Calculate how much you would have in 10 years if you saved 3 500 a year at an annual rate of 6 percent with the company contributing 875 a year Use Exhibit 1 B Round time value factor to 3 decimal places and final answer to the nearest whole dollar 1 Future value

The formula t In m nin 1 can be used to find the number of years t required to multiply an investment m times when r is the per annum interest rate compounded n times a year a How many years will it take to double the value of an IRA that compounds quarterly at the rate of 10 b How many years will it take to triple the value of a savings account that compounds monthly at an annual rate of 2

A house was valued at 115 000 in the year 1994 The va 2008 Use the compund interest formula S P 1 r to a A What was the annual growth rate between 1994 and Round the growth rate to 4 decimal places T B What is the correct answer to part A written in percen T

What is the domain of the following function z 1 z 2 01 1 00 0 42 0 2 00 01 1 2 U 2 00 All real numbers

PRACTICE A A corporation creates a sinking fund in order to have 340 000 to replace some machinery in 8 years How much should be placed in this account at the end of each week if the annual interest rate is e compounded weekly Round your answers to the nearest cent 631 78 How much interest would they earn over the life of the account 77179 52 Determine the value of the fund after 2 4 and 6 years 2 years 3072 67 x x 4 years 1441 22 6 years 900 23 How much interest was earned during the second week of the 4th year MY NOTES

The price of a new Honda Civic is 25000 The car has a depreciation rate of 15 2 How many years will it take for the price of Civic to reach 10000 Round your answer to the nearest tenth 5 6 years 10 1 years 4 8 years 2 3 years

During an experiment a scientist is testing the spread of the deadly bacteria known as MRSA In the beginning of the experiment there are 20 bacteria the rate at which the bacteria spreads and grows is 13 per hour After 48 hours how much bacteria will there be 4422

An investment account pays 3 5 annual interest compounded semiannually If 4000 is invested in this account what is the balance after 15 years O 4663 50 O 6731 20 5702 31

The table shows the amount of money in two different accounts The amount of money in Account 1 is represented by an equation while the amount of money in Account 2 is represented by a description Account 1 f x 100 1 04 Which statement is true Account 2 The account starts with an initial amount of 200 and earns interest at a rate of 3 5 each year O Account 1 starts with less money than Account 2 and Account 1 has a smaller annual rate than Account 2 O Account 1 starts with less money than Account 2 but Account 1 has a larger annual rate than Account 2 O Account 2 starts with less money than Account 1 but Account 1 has a larger annual rate than Account 2 O Account 2 starts with less money than Account 1 and Account 1 has a smaller annual rate than Account 2

Mr Sanchez invested 500 into a savings account The account earns interest at an annual rate of 5 compounded continuously Approximately how much money will be in the fund in 15 years if Mr Sanchez does not make any deposits or withdrawals O 1058 50 O 905 20 O 1325 65

11 Clifford and Hazel Ida can purchase a 4 year CD for 10 000 at 4 5 compounded daily or compounded monthly a What is the amount of the CD at each rate at maturity b What is the difference in the interest earned

17 ALGEBRA Mali and Den Hayashi deposit 19 756 in a 1 year CD with Countrywide Bank which pays 5 49 compounded daily 365 day year a How much will the Hayashis have in their account after one year b How much interest will they have earned

b Find amount and interest using the formula 16 ALGEBRA Tammy Smith deposits 5 000 in First Internet Bank s 5 year CD which pays 5 22 compounded monthly a How much will she have in the account at the end of 5 years b How much interest did she earn

12 National Trust advertises a 1 year certificate of deposit at 4 00 compounded daily with a minimum deposit of 10 000 First National offers a 1 year certificate of deposit at 4 25 compounded quarterly with no minimum deposit John Culbert has 20 000 to invest a Which bank should he choose b How much more would he earn on his 20 000 by choosing that bank

Complete the problems to find the amount of interest Check your answers in the back of the book 2 A 10 000 CD at 4 50 for 4 years compounded quarterly using the table 3 A 10 000 CD at 4 50 for 10 years compounded quarterly using the formula

A man has 205 000 invested in three properties One earns 12 one 10 and one 8 His annual income from the prope is 19 700 and the amount invested at 8 is twice that invested at 12 a How much is invested in each property 12 property 10 property 8 property b What is the annual income from each property 12 property 10 property 8 property Nood Help

9 A toy rocket sitting on a tower is launched vertically upward Its height y at time t is given in the table a Plot the data on the graph below and draw a curve of good fit 3 b What is the equation of the curve of good fit 4 t Y Time s Height m 0 1 2 3 4 5 6 7 8 16 49 60 85 88 81 64 37 0

A species of turtles is thriving in a certain pond There are currently 170 of these turtles living in the pond Suppose that each year the number of these turtles grows by 8 2 What will the population be after 14 years Round your answer to the nearest turtle Number of turtles in pond after 14 years

4 In the formula A t P 1 for compound interest the letters P r n and stand for respectively and A 1 stands for So if 100 is invested at an interest rate of 6 compounded quarterly then the amount after 2 years is and

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Simplify 4y 8y4 O 2y O 2y O 0 2y 1

Question 5 8 4 33 Christian stops for coffee a given numb

Jane has a headache from doing too much school work so she takes 400 mg of ibprofen Each hour the ibprofen decreases by 29 How long will it take for there to be 100 mg of ibprofen left in Jane s system 3 6 hours 3 hours 4 8 hours

When Jamal graduated from college recently his parents gave him 1 460 and told him to use it wisely Jamal decided to use the money to start a retirement account After doing some research about different options he put the entire amount into a tax deferred IRA that pays 16 percent interest compounded annually Calculate how much money Jamal will have in his IRA at the end of 10 years assuming that the interest rate remains the same and that he does not deposit any additional money Use Exhibit 1 A Round time value factor to 3 decimal places and final answer to 2 decimal places IRA balance

Company A invests 10 000 into a savings account with a 4 interest rate compounded continuously Company B invests 8 000 into a savings account with a 9 interest rate compounded continuously At the end of 25 years which company will have saved the most money O Neither they had the same amount O Company B O Company A

Joe and Nick are comparing their savings accounts and they want to know who is getting the most bang for thei buck Joe s Account Nick s Account Invested 6300 has a 5 7 Invested 4 800 has a 7 2 interest rate compounded interest rate compounded continuously and he has had the continuously and he has had the account for 13 years account for 13 years Whose account is worth more Neither both accounts are the same Joe O Nick

r is a precious metal The price of silver fluctua nt market value of silver can be found in the fi rice of metals is usually quoted per Troy ound Saturday 3 18 23 USD United States Doll vert the price in USD to from Troy ounces to 22 45 usp Troy ounce Troy ou

Que Find the monthly payment R the time t in years are given b

Question 5 8 suppose Christian stops for coffee a give alculate how much Christian would save stead Assume there are four weeks in Number of Coffees Price o

A retailer owes a wholesaler 600 000 due in 45 days If the payment is 15 days late there is a 1 penalty charge The retailer can get a 45 day certificate of deposit CD earning 7 per year simple interest or a 60 day certificate earning 8 per year simple interest Is it better to take the 45 day certificate and pay on time or to take the 60 day certificate and pay late with the penalty The 45 day certificate is better The 60 day certificate is better They are equivalent

For her 1st birthday Ruth s grandparents invested 500 in an 18 year certificate for her that pays 8 compounded annually How much will the certificate be worth on Ruth s 19th birthday Round your answer to the nearest cent