Question 1

Calculate, to the nearest cent, the future value of an investment of $12,000 at 0.4% per month, compounded monthly, after 8 years.
​
​FV​ = $ __________

Accepted Answer

The answer of Calculate, to the nearest cent, the future...

Question 2

A 6-year bond costs $9,000 and will pay a total of $2,700 interest over its lifetime. What is its annual interest rate  ?
A)4%
B) 14%
C) 30%
D) 6%
E) 5%

Accepted Answer

The annual interest rate can be calculated by dividing the total interest paid by the number of years and then dividing that result by the initial cost of the bond. So, $2,700 interest / 6 years = $450 annual interest. $450 / $9,000 = 0.05, or 5%.

Question 3

The simple interest on a $7,600 loan at 7% per year amounted to $4,788. When did the loan mature  ?
A)6 months
B) 9 years
C) 21 years
D) 16 years
E) 7 years

Accepted Answer

The answer of The simple interest on a $7,600 loan...

Question 4

During a prolonged recession, property values on Long Island depreciated by 4% every six months. If my house cost $210,000 originally, how much was it worth 6 years later  Round your answer to the nearest cent.
 
$ __________

Accepted Answer

The answer of During a prolonged recession, property values on...

Question 5

Calculate, to the nearest 0.1%, what annual interest rate would be required if you invested $6,000 in Apple stock and ended up with $11,264 when you sold the stock after 9 years  Assume that interest was compounded quarterly.
 
The required annual interest rate is __________%.

Accepted Answer

The answer of Calculate, to the nearest 0.1%, what annual...

Question 6

Inflation is running at 2.1% per year when you deposit $11,000 in an account earning 6.1% per year compounded quarterly. In constant dollars, how much money will you have 4 years from now  Round your answer to the nearest cent.
[Hint: First calculate the value of your account in 4 year's time, and then find its present value based on the inflation rate.]
 
$ __________

Accepted Answer

The answer of Inflation is running at 2.1% per year...

Question 7

My recent marketing idea, the Miracle Algae Growing Kit, has been remarkably successful, with monthly sales growing by 4% every 6 months over the past 8 years. Assuming that I sold 250 kits the first month, what is the present rate of sales  Round your answer to the nearest whole number.
 
__________ kits per month

Accepted Answer

The answer of My recent marketing idea, the Miracle Algae...

Question 8

Calculate, to the nearest cent, the future value of an investment of $12,000 at 0.3% per year, compounded monthly, after 8 years.
​
$ __________

Accepted Answer

The answer of Calculate, to the nearest cent, the future...

Question 9

Calculate, to the nearest cent, the future value of an investment of $12,000 at 4.5% per year, compounded weekly, after 4 years. Assume 52 weeks per year.
​
$ __________

Accepted Answer

The answer of Calculate, to the nearest cent, the future...

Question 10

Determine the amount of money, to the nearest dollar, you must invest now at 5% per year compounded annually, so that you will be a millionaire in 35 years. Round your answer to the nearest cent.
​
$__________

Accepted Answer

The answer of Determine the amount of money, to the...

Question 11

Calculate the present value of an investment that will be worth $1,000 after 6 years at 4% per year compounded annually. Round your answer to the nearest cent.
​
​P​ = __________

Accepted Answer

The answer of Calculate the present value of an investment...

Question 12

Inflation has been running 3% per year. A car now costs $29,000. How much would it have cost 9 years ago  Round your answer to the nearest cent.
 
The car will have cost __________ 9 years ago.

Accepted Answer

The answer of Inflation has been running 3% per year....

Question 13

You deposit $4,000 in an account at the Lifelong Trust Savings and Loan that pays 7% per year compounded quarterly. By how much will your deposit have grown after 5 years  Round the answer to the nearest cent.
 
$__________

Accepted Answer

The answer of You deposit $4,000 in an account at...

Question 14

Determine the amount of money, to the nearest dollar, you must invest at 5.8% per year, compounded semiannually, so that you will be a millionaire in 23 years time. Round your answer to the nearest dollar.
​
$ __________

Accepted Answer

The answer of Determine the amount of money, to the...

Question 15

Find the effective annual interest rate of 10% per year compounded annually, semiannually, quarterly, and monthly. Round the answers to 0.01%.
nominal rate compound annually $r _ { \text {eff } } =$ __________ % per year
nominal rate compound semiannually $r _ { \text {eff } } =$ __________ % per year
nominal rate compound quarterly $r _ { \text {eff } } =$ __________ % per year
nominal rate compound monthly $r _ { \text {eff } } =$ __________ % per year

Accepted Answer

The answer of Find the effective annual interest rate of...

Question 16

Calculate, to the nearest cent, the future value of an investment of $7,000 at 1.5% per year, compounded quarterly, after 7 years.
​
$ __________

Accepted Answer

The answer of Calculate, to the nearest cent, the future...

Question 17

You are offered three investments. The first promises to earn 19% compounded annually, the second will earn 18.5% compounded quarterly, and the third will earn 18% compounded weekly. What is the best investment 
 
The best investment is the __________ investment.

Accepted Answer

The answer of You are offered three investments. The first...

Question 18

A $8,200 loan, taken now, with a simple interest rate of 5% per year, will require a total payment of $10,660. When will the loan mature  ?
A)6 months
B) 4 years
C) 18 years
D) 16 years
E) 6 years

Accepted Answer

The total interest paid on the loan is $10,660 - $8,200 = $2,460. The annual interest is 5% of $8,200, which is $410. To find the number of years, divide the total interest by the annual interest: $2,460 / $410 = 6 years.

Question 19

If Brazil has an annual inflation rate of 11% and an item will cost 130,000 reals in 5 years, what does that same item cost now  Round to the nearest real.
 
__________ reals

Accepted Answer

The answer of If Brazil has an annual inflation rate...

Question 20

You invest $11,000 in Rapid Growth Funds, which appreciate by 2% per year, with yields reinvested quarterly. By how much will your investment have grown after 7 years  Round your answer to the nearest cent.
 
$ __________

Accepted Answer

The answer of You invest $11,000 in Rapid Growth Funds,...

Quiz 3: The Mathematics of Finance

Calculate, to the nearest cent, the future value of an investment of $12,000 at 0.4% per month, compounded monthly, after 8 years. FV = $ __________

A 6-year bond costs $9,000 and will pay a total of $2,700 interest over its lifetime. What is its annual interest rate ?

The simple interest on a $7,600 loan at 7% per year amounted to $4,788. When did the loan mature ?

During a prolonged recession, property values on Long Island depreciated by 4% every six months. If my house cost $210,000 originally, how much was it worth 6 years later Round your answer to the nearest cent. $ __________

Calculate, to the nearest 0.1%, what annual interest rate would be required if you invested $6,000 in Apple stock and ended up with $11,264 when you sold the stock after 9 years Assume that interest was compounded quarterly. The required annual interest rate is __________%.

Calculate, to the nearest cent, the future value of an investment of $12,000 at 0.3% per year, compounded monthly, after 8 years. $ __________

Calculate, to the nearest cent, the future value of an investment of $12,000 at 4.5% per year, compounded weekly, after 4 years. Assume 52 weeks per year. $ __________

Determine the amount of money, to the nearest dollar, you must invest now at 5% per year compounded annually, so that you will be a millionaire in 35 years. Round your answer to the nearest cent. $__________

Calculate the present value of an investment that will be worth $1,000 after 6 years at 4% per year compounded annually. Round your answer to the nearest cent. P = __________

Inflation has been running 3% per year. A car now costs $29,000. How much would it have cost 9 years ago Round your answer to the nearest cent. The car will have cost __________ 9 years ago.

You deposit $4,000 in an account at the Lifelong Trust Savings and Loan that pays 7% per year compounded quarterly. By how much will your deposit have grown after 5 years Round the answer to the nearest cent. $__________

Determine the amount of money, to the nearest dollar, you must invest at 5.8% per year, compounded semiannually, so that you will be a millionaire in 23 years time. Round your answer to the nearest dollar. $ __________

Calculate, to the nearest cent, the future value of an investment of $7,000 at 1.5% per year, compounded quarterly, after 7 years. $ __________

You are offered three investments. The first promises to earn 19% compounded annually, the second will earn 18.5% compounded quarterly, and the third will earn 18% compounded weekly. What is the best investment The best investment is the __________ investment.

A $8,200 loan, taken now, with a simple interest rate of 5% per year, will require a total payment of $10,660. When will the loan mature ?

If Brazil has an annual inflation rate of 11% and an item will cost 130,000 reals in 5 years, what does that same item cost now Round to the nearest real. __________ reals

You invest $11,000 in Rapid Growth Funds, which appreciate by 2% per year, with yields reinvested quarterly. By how much will your investment have grown after 7 years Round your answer to the nearest cent. $ __________

Quiz 3: The Mathematics of Finance

Calculate, to the nearest cent, the future value of an investment of $12,000 at 0.4% per month, compounded monthly, after 8 years. ​ ​FV​ = $ __________

A 6-year bond costs $9,000 and will pay a total of $2,700 interest over its lifetime. What is its annual interest rate ?

The simple interest on a $7,600 loan at 7% per year amounted to $4,788. When did the loan mature ?

During a prolonged recession, property values on Long Island depreciated by 4% every six months. If my house cost $210,000 originally, how much was it worth 6 years later Round your answer to the nearest cent. $ __________

Calculate, to the nearest 0.1%, what annual interest rate would be required if you invested $6,000 in Apple stock and ended up with $11,264 when you sold the stock after 9 years Assume that interest was compounded quarterly. The required annual interest rate is __________%.

Calculate, to the nearest cent, the future value of an investment of $12,000 at 0.3% per year, compounded monthly, after 8 years. ​ $ __________

Calculate, to the nearest cent, the future value of an investment of $12,000 at 4.5% per year, compounded weekly, after 4 years. Assume 52 weeks per year. ​ $ __________

Determine the amount of money, to the nearest dollar, you must invest now at 5% per year compounded annually, so that you will be a millionaire in 35 years. Round your answer to the nearest cent. ​ $__________

Calculate the present value of an investment that will be worth $1,000 after 6 years at 4% per year compounded annually. Round your answer to the nearest cent. ​ ​P​ = __________

Inflation has been running 3% per year. A car now costs $29,000. How much would it have cost 9 years ago Round your answer to the nearest cent. The car will have cost __________ 9 years ago.

You deposit $4,000 in an account at the Lifelong Trust Savings and Loan that pays 7% per year compounded quarterly. By how much will your deposit have grown after 5 years Round the answer to the nearest cent. $__________

Determine the amount of money, to the nearest dollar, you must invest at 5.8% per year, compounded semiannually, so that you will be a millionaire in 23 years time. Round your answer to the nearest dollar. ​ $ __________

Calculate, to the nearest cent, the future value of an investment of $7,000 at 1.5% per year, compounded quarterly, after 7 years. ​ $ __________

You are offered three investments. The first promises to earn 19% compounded annually, the second will earn 18.5% compounded quarterly, and the third will earn 18% compounded weekly. What is the best investment The best investment is the __________ investment.

A $8,200 loan, taken now, with a simple interest rate of 5% per year, will require a total payment of $10,660. When will the loan mature ?

If Brazil has an annual inflation rate of 11% and an item will cost 130,000 reals in 5 years, what does that same item cost now Round to the nearest real. __________ reals

You invest $11,000 in Rapid Growth Funds, which appreciate by 2% per year, with yields reinvested quarterly. By how much will your investment have grown after 7 years Round your answer to the nearest cent. $ __________

Calculate, to the nearest cent, the future value of an investment of $12,000 at 0.4% per month, compounded monthly, after 8 years. FV = $ __________

Calculate, to the nearest cent, the future value of an investment of $12,000 at 0.3% per year, compounded monthly, after 8 years. $ __________

Calculate, to the nearest cent, the future value of an investment of $12,000 at 4.5% per year, compounded weekly, after 4 years. Assume 52 weeks per year. $ __________

Determine the amount of money, to the nearest dollar, you must invest now at 5% per year compounded annually, so that you will be a millionaire in 35 years. Round your answer to the nearest cent. $__________

Calculate the present value of an investment that will be worth $1,000 after 6 years at 4% per year compounded annually. Round your answer to the nearest cent. P = __________

Determine the amount of money, to the nearest dollar, you must invest at 5.8% per year, compounded semiannually, so that you will be a millionaire in 23 years time. Round your answer to the nearest dollar. $ __________

Calculate, to the nearest cent, the future value of an investment of $7,000 at 1.5% per year, compounded quarterly, after 7 years. $ __________