Question 1

Check your answer by use of the financial calculator.

Accepted Answer

The answer of Check your answer by use of the...

Question 2

Paul Lospennato wants to buy a house. Five years from now, he will need $90,000. Paul wants you to calculate how much he needs today to put in the bank (10% compounded semiannually) to reach his goal in the future.

Accepted Answer

The answer of Paul Lospennato wants to buy a house....

Question 3

Joe Diamond deposited $9,000 into the Rong Bank, which pays 12% interest, compounded quarterly. Calculate the amount Joe will have in his account at the end of four years.

Accepted Answer

$9,000 × 1.6047 = $14,442.30.

Question 4

Al Derover wants to buy a used jeep in five years. He estimates the cost will be $12,000. If he invests $8,500 now at a rate of 10% compounded semiannually, will he have enough money to buy the jeep at the end of five years? Show your work.

Accepted Answer

The answer of Al Derover wants to buy a used...

Quiz 19: Compound Interest and Present Value

Check your answer by use of the financial calculator.

Paul Lospennato wants to buy a house. Five years from now, he will need $90,000. Paul wants you to calculate how much he needs today to put in the bank (10% compounded semiannually) to reach his goal in the future.

Joe Diamond deposited $9,000 into the Rong Bank, which pays 12% interest, compounded quarterly. Calculate the amount Joe will have in his account at the end of four years.

Al Derover wants to buy a used jeep in five years. He estimates the cost will be $12,000. If he invests $8,500 now at a rate of 10% compounded semiannually, will he have enough money to buy the jeep at the end of five years? Show your work.