Finite Math Week 4 Quiz –Financial Topics

Finite Math

Week4Quiz  –FinancialTopics

Foreachsectionreadthedirectionsanddeterminethebestanswer

Choose the best answer for the questions below.  Answers are rounded to nearest whole dollar amount.

1. What is the simple interest earned over 6

years on a principal of $55,000 at 12% interest?

a. $39,600 b. $94,600 c. $61,600 d. $58,960

3. What is the value after 4 years if $8,700 is invested in an account that pays 9% interest compounded monthly?

a. $3,300 b.$12,453 c. $9,519

d. $279,979 

5. Which of the following choices of investment

yields the greatest for a deposit of $20,000 over

20 years?

a. 12% simple interest

b. 10.5% compounded quarterly  

c. 11.5% compounded weekly

d. 11% compounded daily

2. What is the effectiverateofinterest for a one year loan of $3,000 given at 15% interest if the interest is compounded quarterly?

a. 15.24% b. 15.27% c. 15.87% d. 15.94%

4. How much is the discount on a loan for which you agree to pay the lender $6,000 in one year at 8% interest?

a. $480

b. $5,520 c. $6,480 d. $960

6. You are due to receive 3 payments (one per year) which you can invest in an account that earns 9% interest per year.   Which sequence of payments yields the greatest amount?

a. $200, $300, $250 b. $250, $100, $300 c. $400, $100, $100 d. $300, $200, $250

7. Compute the monthly loan payment required to pay off $150,000 dollars at 7% interest over 15 years.  (Note: a monthly payment means the interest is compounded monthly)

a.  $1,348.24

b.  $427,342.01

c.  $2,374.12

d.  $16,084.35