Simple & Compound Interest Questions and Answers

Microsoft s stock price peaked at 6118 of its IPO price more than 13 years after the IPO Suppose that 25 000 invested in Microsoft at its IPO price had been worth 1 500 000 6000 of the IP price after exactly 13 years What interest rate compounded annually does this represent Round your answer to two decimal places

Find the future value if 6000 is invested for 13 years at 8 compounded annually Round your answer to the nearest cent

What interest will be earned if 6200 is invested for 2 years at 13 compounded monthly Round your answer to the nearest cent

Purchase Costs Down payment Loan payment Estimated value at end of loan Opportunity cost interest rate Purchase 1 900 550 cost Leasing cost 5 000 for 48 months 5 percent LA 00 SA Leasing Costs Security deposit Lease payment End of lease charges Based on the above calculate the costs of buying and of leasing a motor vehicle Round your answers to the nearest whole dollar 1 040 400 900 for 36 months

What would be the net present value of a microwave oven that costs 240 and will save you 71 a year in time and food away from home Assume an average return on your savings of 6 percent for five years Use Exhibit 1 D Round time value factor to 3 decimal places intermediate and final answers to 2 decimal places Net present

Donald invests 2658 into an account that has an interest rate of 9 and is compounded continuously What will the account balance be in 15 years Write the value of each variable if the value is unknown write a A P IE

After visiting several automobile dealerships Richard selects the used car he wants He likes its 11 800 price but financing through the dealer is no bargain He has 2 000 cash for a down payment so he needs a 9 800 loan In shopping at several banks for an installment loan he learns that interest on most automobile loans is quoted at add on rates That is during the life of the loan interest is paid on the full amount borrowed even though a portion of the principal has been paid back Richard borrows 9 800 for a period of four years at an add on interest rate of 13 percent a What is the total interest on Richard s loan Do not round your intermediate calculations Round your answer to the nearest whole dollar Total interest b What is the total cost of the car Do not round your intermediate calculations Round your answer to the nearest whole dollar Total cost c What is the monthly payment Do not round your intermediate calculations Round your answer to 2 decimal places

FINANCIAL LITERACY Priya and Benjamin each take out a short term loan for 2000 Priya s loan has a 15 annual interest rate compounded continuously and Benjamin s loan has a 12 annual interest rate compounded continuously Priya pays off the loan in one payment at 6 months Benjamin pays off the loan in one payment at 12 months Compare

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You hold a zero coupon bond when there is a sudden change in interest rates It has 9 years to maturity Yield to maturity is 0 07 and rates change by FALLING 0 003 overnight By how much does your bond change in value as a percentage or decimal Zero coupon bonds assume semi annual compounding O 0 0250 O 0 0273 0 003

Laura and Martin obtain a 25 year 150 000 conventional mortgage at 9 5 on a house selling for 180 000 Their monthly mortgage payment including principal and interest is 1311 00 a Determine the total amount they will pay for their house b How much of the cost will be interest c How much of the first payment on the mortgage is applied to the principal a The total amount that Laura and Martin will pay for their house is Round to the nearest dollar as needed b They will pay a total of in interest Round to the nearest dollar as needed c of the first mortgage payment is applied to the principal Round to the nearest cent as needed

Anna is buying a house selling for 295 000 To obtain the mortgage Anna is required to make a 10 down paymen Anna obtains a 30 year mortgage with an interest rate of 6 Click the icon to view the table of monthly payments a Determine the amount of the required down payment b Determine the amount of the mortgage c Determine the monthly payment for principal and interest a Determine the amount of the required down payment b Determine the amount of the mortgage c Determine the monthly payment for principal and interest Round to the nearest cent

A partial payment is made on the date indicated Use the United States rule to determine the balance due on the not the date of maturity The Effective Date is the date the note was written Assume the year is not a leap year Principal 8000 Effective Date Maturity Date Date July 15 Dec 9 Feb 1 Click the icon to view a table of the number of the day of the year for each date Partial Payment Rate 6 Amount 5000 The balance due on the note at the date of maturity is Round to the pon Indl

Jamie needs a new roof on her house The cash cost is 5600 She decides to finance the project by paying 17 0 down with the balance paid in 24 monthly payments of 207 a What finance charge will Jamie pay b What is the APR to the nearest half percent Click the icon to view the APR table a The finance charge is

Suppose that you decide to buy a car for 62 000 including taxes and license fees You saved 13 000 for a down payment The dealer is offering you a choice between two incentives Incentive A is 7000 off the price of the car followed by a three year loan at 5 97 Incentive B does not have a cash rebate but provides free financing no interest over three years What is the difference in monthly payments between the two offers Which incentive is the better deal Use PMT The difference in monthly payments between the two offers is Round to the nearest cent as needed Which incentive is the better deal Choose the correct answer below OA Incentive B is the better deal B Incentive A is the better deal nt This quiz 9 point This question 1 p

Recently More Money 4U offered an annuity that pays 6 6 compounded monthly If 1 885 is deposited into this annuity every month how much is in the account after 8 years How much of this is interest Question content area bottom Part 1 Type the amount in the account enter your response here Round to the nearest dollar

Suppose that you decide to buy a car for 28 635 including taxes and license fees You saved 5000 for a down payment and can get a three year car loan at 5 76 Use PMT The monthly payment is Round to the nearest cent as needed ACCOR P PA nt to find the monthly payment and the total interest for the loan

three marks On January 1 2000 Anthony deposited 5000 in a plan that paid 6 annual interest On anuary 1 2009 he took out all of the 8568 50 from the plan How frequently was the interest compounded

You would like to have 3 500 in 4 years for a special vacation following graduation by making deposits at the end of every six months in an annuity that pays 6 5 compounded semiannually a Use one of the formulas below to determine how much you should deposit at the end of every six months nt A P 14 P A 1 nt b How much of the 3 500 comes from deposits and how much comes from interest a In order to have 3 500 in 4 years you should deposit at the end of every six months Do not round until the final answer Then round up to the nearest dollar mecen

save for retirement you decide to deposit 70 at the end of each month in an IRA that pays 4 5 compounded monthly Use the following formula to determine how much you will have in the IRA when you retire at age 65 a b A A P 1 0 1 r P A Find the interest nt or Part 1 of 2 HW Score 0 0 of 10 points O Points 0 of 1 a You will have approximately in the IRA when you retire Do not round until the final answer Then round to the nearest dollar as needed

You plan to save money for a down payment of 31 000 to purchase an apartment You can only afford to save 6 000 at the end of every 6 months into an account that earns interest at 6 50 compounded monthly How long will it take you to save the planned amount years months Express the answers in years and months rounded to the next payment period

An increase in the debt ratio will generally have no effect on which of these items a Business risk b Total risk c Financial risk d Market risk e The firm s beta Choose the right answer from the drop down list in the cell C12 Answer Provided a firm does not use an extreme amount of debt operating leverage typically affects only EPS while financial leverage affects both EPS and EBIT True or False Choose the right answer from the drop down list in the cell C20 Answer

A developer wants to buy a certain parcel of land The developer feels she can afford payments of 29 000 each half year for the next 8 years How much can she borrow and hold to this budget at an annual rate of 7 8 compounded semianually Round your answer to the nearest cent A 696 273 10 B 340 423 07 196 058 37 D 524 996 94 656 320 20

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Brenda Young desires to have 18 000 eight years from now for her daughter s college fund If she will earn 8 percent compounded annually on her money what amount should she deposit now Use the present value of a single amount calculation Use Exhibit 1 C Round time value factor to 3 decimal places and final answer to 2 decimal places

What amount would you have if you deposited 4 500 a year for 15 years at 6 percent compounded annually Use Exhibit 1 B Round time value factor to 3 decimal places and final answer to 2 decimal places

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View Policies Current Attempt in Progress Kaspar Industries expects credits expected that 75 of the sales wi Compute cash collections from c Credit Sales Janu

1 Inventory is classified as a a current asset income statement b current asset balance sheet c current liability balance sheet d current liability income statement C

General Ma 2 Credit Recovery Lesson 19 Assess

20 In 2008 Yolanda paid 5 875 in Social Security tax If the Social Security tax rate was 6 2 to the maximum income of 94 200 that year what was Yolanda s taxable income

Consider the following hypothetical survey results of 18 to 34 year olds in a certain country in response to the question Are you currently living with your family Women 94 157 251 107 142 249 201 299 a Develop the joint probability table for these data and use it to answer the following questions Yes Men Totals Women Men Yes No Totals Totals 500 b What are the marginal probabilities P 18 to 34 year old woman P 18 to 34 year old man P responded yes P responded no No Totals c What is the probability of living with family given you are an 18 to 34 year old woman in this country Round your answer to four decimal places d what is the probability of living with family given you are an 18 to 34 year old man in this country Round your answer to four decimal places e What is the probability of an 18 to 34 year old in this country living with family F If in this country 49 6 of 18 to 34 year olds are male do you consider this a good representative sample Why

If discount rate 7 federal funds rate 7 interest on reserves 3 level of non borrowed reserves 26 and 2 of borrowed reserves a Draw a graph of this b The discount rate is decreased from 7 to 5 draw effects on the graph c Based on the lowered discount rate what would happen to 1 the federal funds rate 2 the discount rate 3 non borrowed reserves

tion 33 1 point er total spending implies the economy must be producing a larger output of goods and services goods and services must be selling at higher prices either the economy must be producing a larger output of goods and services or selling at higher prices or both employment or productivity must be rising tion 34 1 point ose that Australia produces 210 000 Lawrence Fishburne bobble heads which sell es bobble heads which sells at 4 per unit Production of the Lawrence Fishburn

H 3 Loans You need a new car and have decid you have your choice of financing The cost is have two finance options and need to decide w Option 1 You can choose 0 financing for 60

ans are buying a house for S of the point is

de LiveOnline Class 382 Prep Quiz the blank effective annual yield or the annual percentage yield

Exam e the monthly payment for the installment loan Use the install mount anced P 1 440 A 177 82 B 33 82 Annual Percentage Rate r Question 30 6 Number of Payments per Year n 12

Question 27 Evaluate b 4ac where a 3 b 6 and c 3

ARTICLE How Is Credit Card Interest Calculated The Schumer box lays out the all important costs of your credit card What are the flat fees And what is the interest rate charged But HOW is that interest calculated when you re buying new stuff all month long It s a multi step process which you can read about here before answering the questions that follow Albert has a credit card with an APR of 20 7 and the following daily balances for this billing period Days 1 3 50 Days 4 10 100 Days 11 25 175 Days 26 30 225 1 What is Albert s daily rate Round to the nearest ten thousandth 2 What is his average daily balance Jagy cox shell 3 Assuming Albert doesn t pay it off in full how much interest is Albert charged for this billing period wah 4 Before making his minimum monthly payment what would Albert s total credit card balance be for this billing period 5 Your calculations calculate interest only for the entire month Most credit card companies compound interest daily What effect would that have on Albert s total balance for this billing pried

rep Quiz Question 1 of 50 rmulas listed below will be available to you during the proctored midterm exam vill also be asked to agree to the following honesty statement Please read this carefu is a test in which I will demonstrate my knowledge of the concepts in Units 1 and 2 o ematics or any other textbook any notes any completed assignments homework sites or any person to help me complete this midterm exam n allowed to use a handheld scientific calculator but I cannot use a cell phone calculato ar activity during the midterm exam is monitored so do not attempt to access other mate plation of this honor code will result in a grade of 0 for this midterm exam and possibly a he following information is available for your use during the midterm prep quiz and the m ompound Interest Formula

If 8 000 is invested at 9 per year compounded monthly the future value S at any time t in months is given by S 8 000 1 0075 t a What is the amount after 1 year Round your answer to two decimal places b How long before the investment doubles Round your answer to one decimal place months

Doug bought a new car for 25 000 He estimates his car will depreciate or lose value at a rate of 20 per year The value of his car is modeled by the equation V P 1 r where V is the value of the car P is the price he paid r is the annual rate of depreciation and t is the number of years he has owned the car According to the model what will be the approximate value of his car after 4 years O 2 500 O 9 159 O 22 827 23 791

Find the final amount of money in an account if 8 600 is deposited at 3 5 interest compounded quarterly every 3 months and the money is left for 9 years The final amount is Round answer to 2 decimal places

You deposit 100 each month into an account earning 8 interest compounded monthly a How much will you have in the account in 30 years b How much total money will you put into the account c How much total interest will you earn

You deposit 4000 in an account earning 4 interest compounded monthly How much will you have in the account in 15 years

estion 16 of 20 Policies rent Attempt in Progress then Company s Small Motor Division manufactures a number of Household Division of Chen then assembles and packages such ite ny of their components internally or externally The following cos Fixed cost per unit Variable cost per unit 5 35 11 30

View Policies Current Attempt in Progress Leno Company makes swimsuits and sells these suits Body suit used by highly skilled swimmers The market The department indicates that the All Body suit would suit would have the following manufacturing costs Direct materials 26

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