math 104
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math_104.docxCalculate the amount of simple interest earned.
$1,000 at 13% for 30 years
$
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–/1.57
0/5
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–/1.57
Find the future value, using the future value formula and a calculator. (Round your answer to the nearest cent.)
$822 at 5.5% compounded quarterly for 3 years
$
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3. –/1.57 points SmithNM12 11.1.030.
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Find the present value, using the present value formula and a calculator. (Round your answer to the nearest cent.)
Achieve $225,500 at 8.25% compounded continuously for 8 years, 125 days.
$
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1 2 3 4 5 6 7 8
–/0.19 –/0.19 –/0.19 –/0.19 –/0.19 –/0.19 –/0.19 –/0.24
0/5 0/5 0/5 0/5 0/5 0/5 0/5 0/5
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–/1.57
If $38,500 is invested at 6.1% for 30 years, find the future value if the interest is compounded the following ways. (Round your answers to the nearest cent.)
(a) annually
$
(b) semiannually
$
(c) quarterly
$
(d) monthly
$
(e) daily
$
(f) every minute (N = 525,600)
$
(g) continuously
$
(h) simple (not compounded)
$
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Suppose that an insurance agent offers you a policy that will provide you with a yearly income of $70,000 in 30 years. What is the comparable salary today, assuming an inflation rate of 5% compounded annually? (Round your answer to the nearest cent.)
$
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6. –/1.57 points SmithNM12 11.2.025.
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Convert the credit card rate to the APR.
Oregon,
1
1
4
%
per month
%
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7. –/1.57 points SmithNM12 11.2.031.
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1 2 3
–/0.52 –/0.52 –/0.53
0/5 0/5 0/5
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–/1.57
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. (Round your answers to the nearest cent.)
$200 balance, 18%, $50 payment
(a) previous balance method
$
(b) adjusted balance method
$
(c) average daily balance method
$
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8. –/1.57 points SmithNM12 11.2.045.
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1 2 3 4
–/0.39 –/0.39 –/0.39 –/0.4
0/5 0/5 0/5 0/5
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–/1.57
Assume the car can be purchased for 0% down for 60 months (in lieu of rebate).
A car with a sticker price of $42,150 with factory and dealer rebates of $5,100
(a) Find the monthly payment if financed for 60 months at 0% APR. (Round your answer to the nearest cent.)
$
(b) Find the monthly payment if financed at 2.5% add-on interest for 60 months. (Round your answer to the nearest cent.)
$
(c) Use the APR approximation formula to find the APR for part (b). (Round your answer to one decimal place.)
%
(d) State whether the 0% APR or the 2.5% add-on rate should be preferred.
0% APR 2.5% add-on rate
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9. –/1.57 points SmithNM12 11.2.048.
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For the car loan described, give the following information.
A newspaper advertisement offers a $4,500 used car for nothing down and 36 easy monthly payments of $154.62.
(a) amount to be paid
$
(b) amount of interest
$
(c) interest rate (Round your answer to two decimal places.)
%
(d) APR (rounded to the nearest tenth percent)
%
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10. –/1.57 points SmithNM12 11.2.059.
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Karen and Wayne need to buy a refrigerator because theirs just broke. Unfortunately, their savings account is depleted, and they will need to borrow money in order to buy a new one. Sears offers them an installment loan at 12% (add-on rate). If the refrigerator at Sears costs $1,538 plus 5% sales tax, and Karen and Wayne plan to pay for the refrigerator for 3 years, what is the monthly payment? (Round your answer to the nearest cent.)
$
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11. –/1.57 points SmithNM12 11.5.020.CMI.
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Use a calculator to evaluate an ordinary annuity formula
A = m
1 +
r
n
nt
− 1
r
n
for m, r, and t (respectively). Assume monthly payments. (Round your answer to the nearest cent.)
$150; 5%; 40 yr
A = $
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12. –/1.57 points SmithNM12 11.5.038.CMI.
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Find the amount of periodic payment necessary for the deposit to a sinking fund. (Round your answer to the nearest cent.)
$
Amount Needed
A Frequency
n Rate
r Time
t
$50,000 semiannually 15% 15 yr
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13. –/1.57 points SmithNM12 11.6.015.CMI.
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Use a calculator to evaluate the amortization formula
m =
P
r
n
1 −
1 +
r
n
−nt
for the values of the variables P, r, and t (respectively). Assume n = 12. (Round your answer to the nearest cent.)
$150,000; 4%; 15 yr
$
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14. –/1.57 points SmithNM12 11.6.032.
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Find the monthly payment for the loan. (Round your answer to the nearest cent.)
$900 loan for 12 months at 11%
$
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15. –/1.57 points SmithNM12 11.6.040.CMI.
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Find the monthly payment for the loan. (Round your answer to the nearest cent.)
A $110,000 home bought with a 20% down payment and the balance financed for 30 years at 10.5%
$
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1
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–/1.57
Find the monthly payment for the loan. (Round your answer to the nearest cent.)
Finance $650,000 for a warehouse with a 11.50% 30-year loan
$
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17. –/1.57 points SmithNM12 11.7.016.
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1 2
–/0.78 –/0.79
0/5 0/5
Total
–/1.57
Classify the financial problem. Assume a 10% interest rate compounded annually.
Find the value of a $1,000 certificate in 6 years.
amortization sinking fund present value ordinary annuity future value
Answer the question. (Round your answer to the nearest cent.)
$
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18. –/1.57 points SmithNM12 11.7.026.
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The amount to be financed on a new car is $9,500. The terms are 7% for 3 years. What is the monthly payment?
(a) State the type.
ordinary annuity amortization sinking fund present value future value
(b) Answer the question. (Round your answer to the nearest cent.)
$
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19. –/1.74 points SmithNM12 11.7.038.
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Points
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1 2
–/0.87 –/0.87
0/5 0/5
Total
–/1.74
If an apartment complex will need painting in
3
1
2
years and the job will cost $45,000, what amount needs to be deposited into an account now in order to have the necessary funds? The account pays 9% interest compounded semiannually.
(a) State the type of the problem.
present value ordinary annuity amortization future value sinking fund
(b) Answer the question. (Round your answer to the nearest cent.)
$
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