week 5 quiz
Question 1
Find the simple interest on a $400 investment made for 5 years at an interest rate of 7%/year. What is the accumulated amount?
[removed] | A. | The simple interest is $140, the accumulated amount is $540. |
[removed] | B. | The simple interest is $115, the accumulated amount is $515. |
[removed] | C. | The simple interest is $120, the accumulated amount is $520. |
[removed] | D. | The simple interest is $125, the accumulated amount is $555. |
5 points
Question 2
If the accumulated amount is $3,720 at the end of 3 years and the simple rate of interest is 8%/year, what is the principal?
[removed] | A. | The principal is $3,500. |
[removed] | B. | The principal is $3,360. |
[removed] | C. | The principal is $3,000. |
[removed] | D. | The principal is $3,200. |
5 points
Question 3
Find the accumulated amount A if the principal P = $2,000 is invested at the interest rate of r = 6% per year for t = 6 years, compounded annually.
[removed] | A. | The accumulated amount is $3,508.28. |
[removed] | B. | The accumulated amount is $3,194.16. |
[removed] | C. | The accumulated amount is $2,837.04. |
[removed] | D. | The accumulated amount is $2,708.89. |
5 points
Question 4
Find the accumulated amount A if the principal P = $11,000 is invested at the interest rate of r = 5% per year for t = 5.5 years, compounded quarterly.
[removed] | A. | The accumulated amount is $14,585.32. |
[removed] | B. | The accumulated amount is $13,785.93. |
[removed] | C. | The accumulated amount is $14,100.05. |
[removed] | D. | The accumulated amount is $14,457.17. |
5 points
Question 5
Determine the simple interest rate at which $1,500 will grow to $1,550 in the 8 months. Round your answers to the nearest tenth of percent.
[removed] | A. | The interest rate is 5%/year. |
[removed] | B. | The interest rate is 4.33%/year. |
[removed] | C. | The interest rate is 4.76%/year. |
[removed] | D. | The interest rate is 66.67%/year. |
[removed] | E. | The interest rate is 3.06%/year. |
5 points
Question 6
Find the present value of $40,000 due in 4 years at the given rate of interest 8%/year compounded monthly.
[removed] | A. | The present value is $28,948.67. |
[removed] | B. | The present value is $29,433.94. |
[removed] | C. | The present value is $29,076.82. |
[removed] | D. | The present value is $29,748.06. |
5 points
Question 7
In order to help finance the purchase of a new house, the Abdullahs have decided to apply for a short-term loan (a bridge loan) in the amount of $140,000 for a term of 1 mo. If the bank charges simple interest at the rate of 12%/year, how much will the Abdullahs owe the bank at the end of the term?
[removed] | A. | $141,400 |
[removed] | B. | $140,012
|
[removed] | C. | $146,800 |
[removed] | D. | $144,900 |
5 points
Question 8
The Kwans are planning to buy a house 6 years from now. Housing experts in their area have estimated that the cost of a home will increase at a rate of 6%/year during that period. If this economic prediction holds true, how much can the Kwans expect to pay for a house that currently costs $160,000?
[removed] | A. | $218,199 |
[removed] | B. | $221,562 |
[removed] | C. | $230,490 |
[removed] | D. | $226,963 |
5 points
Question 9
The manager of a money market fund has invested $4.2 million in certificates of deposit that pay interest at the rate of 5.4%/year compounded quarterly over a period of 5 years. How much will the investment be worth at the end of 5 years?
[removed] | A. | 5,491,921.88 |
[removed] | B. | 3,211,990.34 |
[removed] | C. | 1,291,921.88 |
[removed] | D. | 12,024,347.20 |
5 points
Question 10
Find the effective rate corresponding to nominal rate 6% / year compounded monthly. Round the answers to the nearest hundredth of percent.
[removed] | A. | 6.538% |
[removed] | B. | 5.858% |
[removed] | C. | 6.598% |
[removed] | D. | 6.168% |
5 points
Question 11
Find the interest rate needed for an investment of $4,000 to grow to an amount of $5,000 in 4 yr if interest is compounded continuously. Please round the answer to the nearest hundredth of percent.
[removed] | A. | 5.58 %/yr |
[removed] | B. | 5.70 %/yr |
[removed] | C. | 6.63 %/yr |
[removed] | D. | 5.01 %/yr |
[removed] | E. | 5.92 %/yr |
5 points
Question 12
Anthony invested a sum of money 6 yr ago in a savings account that has since paid interest at the rate of 7%/year compounded quarterly. His investment is now worth $19,713.77. How much did he originally invest? Please round the answer to the nearest cent.
[removed] | A. | $13,000.01 |
[removed] | B. | $12,500.01 |
[removed] | C. | $14,000.01 |
[removed] | D. | $11,500.01 |
[removed] | E. | $11,000.01 |
5 points
Question 13
Georgia purchased a house in 1998 for $220,000. In 2003 she sold the house and made a net profit of $50,000. Find the effective annual rate of return on her investment over the 5-yr period. Please round the answer to the nearest tenth of percent.
[removed] | A. | 3.7%/yr |
[removed] | B. | 3.1%/yr |
[removed] | C. | 4.4%/yr |
[removed] | D. | 4.2%/yr |
[removed] | E. | 5.6%/yr |
5 points
Question 14
Find the amount of an ordinary annuity of 10 yearly payments of $1,800 that earn interest at 10% per year, compounded annually.
[removed] | A. | $4,668.74 |
[removed] | B. | $28,687.36 |
[removed] | C. | $87,798.04 |
[removed] | D. | $3,600.00 |
5 points
Question 15
Robin, who is self-employed, contributes $4,000/year into a Keogh account. How much will he have in the account after 15 years if the account earns interest at the rate of 6.5%/year compounded yearly?
[removed] | A. | $96,728.68 |
[removed] | B. | $10,287.36 |
[removed] | C. | $158,267.14 |
[removed] | D. | $3,771.28 |
5 points
Question 16
If a merchant deposits $1,500 annually at the end of each tax year in an IRA account paying interest at the rate of 10%/year compounded annually, how much will she have in her account at the end of 25 years? Round your answer to two decimal places.
[removed] | A. | $16,252.06 |
[removed] | B. | $147,520.59 |
[removed] | C. | $5,250.00 |
[removed] | D. | $34,663.65 |
5 points
Question 17
Find the present value of an ordinary annuity of $600 payments each made quarterly over 5 years and earning interest at 4% per year compounded quarterly.
[removed] | A. | $8,154.20 |
[removed] | B. | $2,671.09 |
[removed] | C. | $10,827.33 |
[removed] | D. | $56,916.87 |
5 points
Question 18
Juan invested $24,000 in a mutual fund 5 years ago. Today his investment is worth $34,616. Find the effective annual rate of return on his investment over the 5-year period.
[removed] | A. | 10.3%/year |
[removed] | B. | 8%/year |
[removed] | C. | 83%/year |
[removed] | D. | 8.3%/year |
5 points
Question 19
Find the amount of an ordinary annuity for 5 years of quarterly payments of $2,200 that earn interest at 4% per year compounded quarterly.
[removed] | A. | $11,222.21 |
[removed] | B. | $65,511.77 |
[removed] | C. | $48,441.81 |
[removed] | D. | $2,684.42 |
5 points
Question 20
Find the present value of the ordinary annuity. Please round the answer to the nearest cent.$2,000 per semiannual period for 7 yr at 12%/year compounded semiannually
[removed] | A. | P = $18,589.97 |
[removed] | B. | P = $17,913.54 |
[removed] | C. | P = $20,003.52 |
[removed] | D. | P = $13,147.80 |
[removed] | E. | P = $9,629.07 |
10 years ago
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