Simple & Compound Interest Questions and Answers

0 4 points The value of Nazanin s baseball card collection has been increasing by 7 each year If it is worth 934 now how much will it be worth after 2 years

Physical capital investment by firms is usually undertaken when firms have a positive outlook for both the near and long term prospects of the economy and the specific industry How would a fall in investor confidence in the economy due to political instability in a neighboring country affect the market for loanable funds Shift the appropriate curve to depict your answer To refer to the graphing tutorial for this question type please click here Interest rate uilibrium at point A D1

mcide whether the following statement makes sense or is clearly true or does not make sense or is clearly false Explain your reasoning interest rates stay at 5 APR and I continue to make my monthly 25 deposits into my retirement plan I should have at least 30 000 saved when I retire in 25 yea the statement Round to the n because I will have in my retirement account when I retire in 25 years does not make sense does make sense

6 US manufacturing output roughly doubled in the past twenty five years but that higher output is produced with 1 3 fewer workers How much has productivity increased in US manufacturing over the past twenty five years

2 Using the following data calculate GDP GNP and NNP by both the expenditure approach and the income approach dollars in billions Indirect Business Taxes Personal Consumption Expenditures Gross Private Domestic Investment Government Purchases of Goods Services Depreciation Capital Consumption Allowance Wages Salaries Income Receipts from Rest of the World Income Payments to Rest of the World By the way what is Net Investment for this economy 217 5 2 672 8 895 3 934 7 287 2 2 896 5 247 1 188 9 Net Exports Corporate Profits Interest Income Proprietors Income Rents 23 3 680 7 279 8 130 6 33 8

Question 12 Round your answers to the nearest cent Alyssa opened a retirement account with 8 25 APR in the year 2000 Her initial deposit was 16 500 a How much will the account be worth in 2025 if interest compounds monthly b How much more would she make if interest compounded continuously Hint Find the difference Question Help VIDEO Post to forum

The Stock Market Alexander is a stockbroker He earns 11 commission each week Last week he sold 4 500 worth of stocks How much did he make last week in commission If he averages that same amount each week how much did he make in commission in 2011 Last week he made 495 in commission In 2011 he made in commission

1 Suppose that an investor with a five year investment horizon is considering purchasing a seven year 7 coupon bond selling at par The investor expects that he can reinvest the coupon payments at an annual interest rate of 9 4 and that at the end of the investment horizon two year bonds will be selling to offer a yield to maturity of 11 2 What is the total return on this investment The investor has a five year investment horizon and purchases a seven year 7 coupon bond for 1 000 The yield to maturity for this bond is 7 since it is selling at par The investor expects to be able to reinvest the coupon interest payments at an annual interest rate of 9 4 and that at the end of the planned investment horizon the then two year bond will be selling to offer a yield to maturity of 11 2 Hint using semiannual interest to compute total return for a bond on p 61 C 7 1 000 2 Step 1 to apply eqn 3 7 coupon interest interest on interest C 1 r r Step 2 utilizing eqn 2 7 2 8 projected sale price PV coupon payments PV par value 1 1 r r M 1 r Step 3 sum up 1 2 as the total future dollars Step 4 to obtain the semiannual total return use the formula Step 5 Double step 4 for the total return total future dollars purchase price of bond

Adjusting entries for unearned and accrued fees The balance in the unearned fees account before adjustment at the end of the year is 113 370 Of these fees 70 290 have been earned In addition 13 600 of fees have been earned but have not been billed a Journalize the adjusting entry to adjust the unearned fees account If an amount box does not require an entry leave it blank Unearned Fees Fees Earned Feedback Check My Work Consider the accounts involved in the recording of this transaction Recall that unearned revenues are liabilities until they become earned revenues over time or during normal operations Unearned fees decrease for the amount of the revenue that has been earned b Journalize the adjusting entry to record the accrued fees If an amount box does not require an entry leave it blank Accounts Receivable Fees Earned Feedback Check My Work

The prepaid insurance account had a balance of 5 900 at the beginning of the year The account was debited for 6 500 for premiums on policies purchased during the year Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment a The amount of unexpired insurance applicable to future periods is 1 100 If an amount box does not require an entry leave it blank Insurance Expense Prepaid Insurance Feedback Check My Work b The amount of insurance expired during the year is 11 300 If an amount box does not require an entry leave it blank Insurance Expense Prepaid Insurance

Next question Suppose that you decide to buy a car for 57 000 including taxes and license fees You saved 10 000 for a down payment The dealer is offering you a choice between two incentives Incentive A is 6000 off the price of the car followed by a four year loan at 7 08 Incentive B does not have a cash rebate but provides free financing no interest over four years What is the difference in monthly payments between the two offers Which incentive is the better deal Use PMT PA 9 The difference in monthly payments between the two offers is Round to the nearest cent as needed Save

The price of a condominium is 188 000 The bank requires a 5 down payment and one point at the time of closing The cost of the condominium is financed with a 30 year fixed rate mortgage at 9 5 Use the following formula to determine the regular payment amount Complete parts a through e below PMT P a Find the required down payment b Find the amount of the mortgage c How much must be paid for the one point at closing Round to the nearest dollar as needed d Find the monthly payment excluding escrowed taxes and insurance Round to the nearest dollar as needed e Find the total cost of interest over 30 years

Suppose that you decide to borrow 13 000 for a new car You can select one of the following loans each requiring regular monthly payments Installment Loan A three year loan at 6 3 Installment Loan B five year loan at 5 2 P Use PMT to complete parts a through c below a Find the monthly payments and the total interest for Loan A The monthly payment for Loan A is Do not round until the final answer Then round to the nearest cent as needed The total interest for Loan A is Round to the nearest cent as needed b Find the monthly payments and the total interest for Loan B The monthly payment for Loan B is Do not round until the final answer Then round to the nearest cent as needed The total interest for Loan B is Round to the nearest cent as needed c Compare the monthly payments and the total interest for the two loans

Suppose that you borrow 12 000 for three years at 6 toward the purchase of a car Use PMT find the monthly payments and the total interest for the loan The monthly payment is Do not round until the final answer Then round to the nearest cent as needed The total interest for the loan is Use the answer from part a to find this answer Round to the nearest cent as needed P A nt to

At the age of 27 to save for retirement you decide to deposit 90 at the end of each month in an IRA that pays 4 5 compounded monthly a Use the following formula to determine how much you will have in the IRA when you retire at age 65 A A P 1 r 1 r A b Find the interest or I question 1 point s possible Submit quiz a You will have approximately when you retire Do not round until the final answer Then round to the nearest dollar as needed in the IRA b The interest is approximately Use the answer from part a to find this answer Round to the nearest dollar as needed

Biltz Company uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to jobs During the year the company actually incurred manufacturing overhead costs of 582 000 and 136 000 direct labor hours were worked The company estimated that it would incur 526 000 of manufacturing overhead during the year and that 150 800 direct labor hours would be worked By how much was manufacturing overhead overallocated or underallocated for the year Round intermediary calculations to the nearest cent OA 56 000 overallocated B 107 360 overallocated OC 56 000 underallocated D 107 360 underallocated

15 If an article online looks reliable but contains a lot of spelling or grammar errors why should students avoid using it OA The students risk making those errors themselves without realizing it OB These errors change the meaning of important ideas in unusual ways Oc Spreading the article could potentially damage the writer s reputation D An accurate article is usually well written and professionally edited

3 First National Bank charges 13 1 percent compounded monthly on its business loans First United Bank charges 13 4 percent compounded semiannually As a potential borrower which bank would you go to for a new loan

es Liabilities and Equity Accounts payable Income taxes payable Total current liabilities Equity Common stock 2 par value Paid in capital in excess of par value common stock Retained earnings Total liabilities and equity GOLDEN CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses excluding depreciation Depreciation expense Income before taxes Income taxes expense Net income Required 1 832 000 1 094 000 738 000 502 000 54 000 182 000 33 200 148 800 Additional Information on Current Year Transactions a Purchased equipment for 49 500 cash b Issued 12 800 shares of common stock for 5 cash per share c Declared and paid 97 000 in cash dividends 103 000 36 000 139 000 601 600 210 400 123 500 1 074 500 79 000 29 100 108 100 576 000 172 000 71 700 927 800

4 Part 1 of 2 5 points Skipped eBook Print References Required information Cash flows from operating activities GOLDEN CORPORATION Statement of Cash Flows For Current Year Ended December 31 Adjustments to reconcile net income to net cash provided by operations Income statement items not affecting cash Changes in current assets and current liabilities Cash flows from investing activities 0 0

oped Book Hint Print erences Hampton Company reports the following information for its recent calendar year Selected Year End Balance Sheet Data Accounts receivable increase 75 000 Inventory decrease 41 000 Salaries payable increase 13 000 7 000 14 000 Income Statement Data Sales Expenses Cost of goods sold Salaries expense Depreciation expense Net income Required Prepare the operating activities section of the statement of cash flows using the indirect method Note Amounts to be deducted should be indicated with a minus sign Statement of Cash Flows partial Cash flows from operating activities indirect method Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash 6 000 3 000 800 Changes in current operating assets and liabilities

Consider the present value of the following achieve 6 000 in three years at 2 5 simple interest Determine the future value A in dollars the annual interest rate r as a decimal and the time t in years A r Find the present value using the present value formula and a calculator Round your answer to the nearest cen th

5 60 Present value of a complex stream Don Draper has signed a contract that will pay at the end of year 6 If 8 percent is the appropriate discount rate what is the present him 80 000 at the end of each year for the next 6 years plus an additional 100 000 value of this contract 5 61 Present value of a complex stream Don Dias his retirement

2 es Required information The following information applies to the questions displayed below Raphael Corporation s balance sheet shows the following stockholders equity section Preferred stock 5 cumulative par value 1 000 shares authorized issued and outstanding Common stock par value 4 000 shares authorized issued and outstanding Retained earnings Total stockholders equity Required 1 Determine the par values of the corporation s preferred stock and its common stock Corporation s preferred stock Corporation s common stock Par Value 80 000 120 000 340 000 540 000

4 3 pts 1 5 each Show organized work below list calculator steps if you don t use a proportional equation Clearly indicate your final answer which should be rounded to the nearest hundredth if the answer is an ordinary decimal number or rounded to the nearest tenth of a percent if the answer is a percent a 18 95 is 6 2 of what number

Find the future value using the future value formula and a calculator Round your answer to the nearest cent 119 400 at 5 5 compounded continuously for 20 years

5 The price of a certain brand of phones is normally distributed with a mean of 430 and a standard deviation of 70 What percentage of these phones cost less than 525 Round as needed and explain your answer

A principal of 2800 is invested at 6 25 interest compounded annually How much will the investment be worth after 12 years Use the calculator provided and round your answer to the nearest dollar 0 X

Suppose Christian stops for coffee a given number of times a week Use the information in the following table to calculate how much Christian would save if he deposited the amount he woul spend on coffee into an ordinary annuity instead Assume there are four weeks in a month Number of Coffees Per Week 8 Price of One Cup 4 45 Christian would have in the annuity Round to the nearest cent as needed Interest Rate for Annuity 2 8 Number of Years 17

Use the average daily balance method to compute the finance charge on the credit card account for the month of August 31 days The starting balance from the previous month is 290 The transactions on the account for the month are given in the table to the right Assume an annual interest rate of 25 on the account and that the billing date is August 1st The finance charge for the month of August is Round to the nearest cent as needed BICECH Date August 3 August 4 August 20 August 24 Made payment of 82 Charged 150 for hiking boots Transaction Charged 20 for gasoline Charged 35 for restaurant meal

Use the formula for future value A P 1 rt and elementary algebra to find the missing quantity in the table below A 2 100 P 1 750 r 4

Compute the monthly payments for an add on interest loan of 2220 with an annual interest rate of 6 and a term of 5 years The monthly payment is Round to the nearest cent as needed

Michael wants to buy some new exercise equipment for his fitness center for 171 000 financed at an annual interest rate of 13 using the add on method If Michael pays off the loan in 4 years he will pay 88 920 in interest If Michael decides instead to pay off the loan in 5 years how much more interest will he pay than if he paid off the loan in 4 years He will pay more in interest if he paid off the loan in 5 years Type an integer or a decimal CIE

Ann and Tom want to establish a fund for their grandson s college education What lump sum must they deposit at a 7 annual interest rate compounded monthly in order to have 40 000 in the fund at the end of 15 years They should deposit Round up to the nearest cent

Use the simple interest formula I Prt and elementary algebra to find the missing quantities in the table below I 300 P 3000 I P r t 2 years

A student borrows 5000 at 15 for 3 months to pay tuition Find the total amount due using simple interest The total amount due after 3 months is

ook lint rint rences Paulson Company issues 9 four year bonds on January 1 of this year with a par value of 106 000 and semiannual interest payments Semiannual Period End 0 January 1 issuance 1 June 30 first payment Carrying Value 99 147 100 004 100 861 2 December 31 second payment Use the above straight line bond amortization table and prepare journal entries for the following a The issuance of bonds on January 1 b The first interest payment on June 30 c The second interest payment on December View transaction list Journal entry worksheet 1 2 3 Unamortized Discount 6 853 5 996 5 139

2 Tano Company issues bonds with a par value of 81 000 on January 1 2021 The bonds annual contract rate is 6 and interest is paid semiannually on June 30 and December 31 The bonds mature in three years The annual market rate at the date of issuance is 8 and the bonds are sold for 76 753 S eBook Hint Print ferences 1 What is the amount of the discount on these bonds at issuance 2 How much total bond interest expense will be recognized over the life of these bonds 3 Prepare a straight line amortization table for these bonds Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Check my we

Shane has a retirement plan with an insurance company He can choose to be paid either 320 per month for 20 years or a lump sum of 35 000 Which is the better option Assume an annua interest rate of 12 Select the correct choice below and if necessary fill in the answer box to complete your choice OA The present value of the retirement plan is Round to the nearest cent as needed this is worse than the lump sum of 35 000 OB The present value of the retirement plan is Round to the nearest cent as needed OC The present value of the retirement plan is the same as the lump sum of 35 000 this is better than the lump sum of 35 000

the annual interest rate and a line of an amortization schedule for that loan complete the next line of the schedule Assume that payments are made monthly Annual Interest Rate Payment 7 9 413 66 Interest Paid 43 64 Fill out the amortization schedule below Annual Interest Rate 7 9 Interest Paid 43 64 Payment 413 66 Round to the nearest cent as needed Paid on Principal Balance 370 02 6 262 38 Paid on Principal 370 02 Balance 6 262 38

Assume that the mortgage is a 20 year adjustable rate mortgage a Use the table to find the monthly mortgage payments b Make a rough estimate of your monthly payments for year 3 by recalculating the monthly payments for a 20 year mortgage for the original amount at the new interest rate P 197 000 beginning interest rate 6 rate increases 2 each year Click the icon to view a table of monthly payments on a 1 000 loan Identify the problem solving method that should be used Choose the correct answer below OA The Always Principle B The Three Way Principle C Guessing is OK D Relate a New Problem to an Older One a The monthly payments for this loan are Type an integer or a decimal Monthly Payment on a 1 000 loan Annual Interest Rate 4 5 6 8 10 12 3 29 53 29 97 30 42 31 34 32 27 33 21 Number of Years for the Loan 20 4 22 58 10 10 12 6 06 6 60 10 61 23 03 23 49 11 10 7 16 24 41 12 13 8 36 13 22 9 65 14 35 11 01 25 36 26 33 30 4 77 5 37 6 00 7 34 8 78 10 29 X

21 Major Company reported 2024 income of 310 000 from continuing operations before income taxes and a before tax loss on discon operations of 78 000 All income is subject to a 25 tax rate In the income statement for the year ended December 31 2024 Maja Company would show the following line item amounts for income tax expense and net income Multiple Choice 58 000 and 388 000 respectively 77 500 and 174 000 respectively 58 000 and 232 500 respectively Sty G

Use the information in the table to calculate a the deposit due at signing b the amount you pay in points and c the total amount that you must pay at closing for your house Other Closing Cost of Home 110 000 Costs 2 400 Deposit 25 Points 5 a The deposit due at signing is 27 500 Type an integer or a decimal b The amount to pay in points is Type an integer or a decimal

11 In the statement of shareholders equity Retained Earnings had a beginning balance of 26 800 During the period the company reports a net income of 11 800 and a dividend of 5 800 The ending balance in the Retained earnings account is 01 26 42 Multiple Choice O O 38 600 44 400 11 800

1 28 36 Excerpts from Hulkster Company s December 31 2024 and 2023 financial statements are presented below Accounts receivable Merchandise inventory Net sales Cost of goods sold Total assets Total shareholders equity Net income Hulkster s 2024 profit margin is closest to Multiple Choice 2024 56 000 36 000 240 000 130 000 441 000 256 000 44 500 2023 44 000 51 000 230 000 116 000 413 000 233 000 36 000 D

2 5 of what number is 2 5

What lump sum must be invested at 7 compounded monthly for the investment to grow to 74 000 in 14 years The lump sum invested at 7 compounded monthly grows to 74 000 in 14 years Do not round until the final answer Then round to the nearest cent as needed

Number of Copies 260 325 488 Cost of Copy Order 5 20 6 50 9 76 Is the cost of the copy order proportional to the number of copies How do you know Yes the relationship is proportional because the ratio of the cost of the order and the number of copies is equal to a constant value This also means that the cost of the order is a constant multiple of the number of copies No the relationship is not proportional because the ratio of the cost of the order and the number of copies is not equal to a constant value This also means that the cost of the order is not a constant multiple of the number of copies If the relationship is proportional predict the cost of an order of 600 copies rounded to the nearest penny If the relationship is not proportional type NO SOLUTION in the answer blank The cost of 600 copies is Submit Answer 4 Points Viewing Saved Work Revert to Last Response DETAILS MY NOTES ASK YOUR TEACHER

When most economists wake up in the morning their first decision is whether or not to hit the snooze bar on the alarm clock What statement best represents their thought process as a rational decision maker O I had a really late night grading exams and I deserve 10 more minutes of sleep The total amount of work I have to do today is rather small so the total benefit to going to work for a full 8 hours is also small The total amount of work I have to do today is rather small so the marginal cost of going to work 10 minutes late is small O The total amount of work I have to do today is rather small so the marginal benefit of sleeping 10 more minutes is rather large The marginal benefit of sleeping 10 more minutes is greater than the marginal benefit of 10 more minutes of work

Raina wants to save money to purchase a car She buys an annuity with monthly payments that earn 2 interest compounded monthly Payments will be made at the end of each month Find the total value of the annuity in 6 years if each monthly payment is 260 Do not round any intermediate computations and round your final answer to the nearest cent If necessary refer to the list of financial formulas X