Question 1

Find the compound interest earned. Round to the nearest cent.
-$600 at 5% compounded quarterly for   years

Accepted Answer

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Question 2

Provide an appropriate response.
-An investment company pays 7% compounded quarterly.What is the effective rate? (Compute the answer to two decimal places).

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The answer of Provide an appropriate response.
-An investment company pays...

Question 3

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing cycle. Use a 365-day year.
-Month: April (30 days)Previous month's balance: $960 Interest rate: 21%

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The answer of Use the average daily balance method to...

Question 4

Provide an appropriate response.
-How much should you invest now at 6% compounded semiannually to have $8,500 to buy a car in 2.5 years?

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-How much should you...

Question 5

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing cycle. Use a 365-day year.
-Month: February (28 days)Previous month's balance: $1240 Interest rate: 22%

Accepted Answer

To use the average daily balance method, we must find the sum of the daily balances divided by the number of days in the billing cycle.

The daily balance is calculated by taking the previous day's balance, adding any new charges or subtracting any payments, and then repeating this process for each day in the billing cycle.

For this problem, we can assume that there are no new charges or payments, so the daily balance will remain constant at $1240. Therefore, the average daily balance will also be $1240.

The formula for calculating interest using the average daily balance method is: Average Daily Balance x Interest Rate x Number of Days in the Billing Cycle / 365.

Plugging in the numbers from the problem, we get:

$1240 x 0.22 x 28 / 365 = $19.71

Therefore, the amount of interest charged at the end of the billing cycle is $19.71, which corresponds to answer choice B.

Question 6

Find the compound amount for the deposit. Round to the nearest cent.
-$15,000 at 10% compounded semiannually for 10 years

Accepted Answer

The formula for compound interest is: A = P(1 + r/n)^(nt), where:
A = final amount
P = principal (initial amount)
r = annual interest rate (as a decimal)
n = number of times the interest is compounded per year
t = number of years
Plugging in the given values, we get:
A = 15000(1 + 0.1/2)^(2*10)
A = 15000(1.05)^20
A = $39,799.47
Therefore, the correct choice is A.

Question 7

Provide an appropriate response.
-What amount will be in an account after 1.5 years if $4,000 is invested at 5% compounded semiannually?

Accepted Answer

The answer of Provide an appropriate response.
-What amount will be...

Question 8

Find the compound amount for the deposit. Round to the nearest cent.
-$1100 at 3% compounded quarterly for 2 years

Accepted Answer

The compound amount can be calculated using the formula A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount (the initial amount of money), r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the time the money is invested for in years. For this problem, P = $1100, r = 3% or 0.03, n = 4 (since interest is compounded quarterly), and t = 2 years. Plugging these values into the formula gives A = 1100(1 + 0.03/4)^(4*2) = $1167.76.

Question 9

Find the compound amount for the deposit. Round to the nearest cent.
-$600 at 8% compounded quarterly for 5 years

Accepted Answer

The compound amount can be calculated using the formula A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount ($600), r is the annual interest rate (8% or 0.08), n is the number of times that interest is compounded per year (quarterly, so 4 times), and t is the time the money is invested for (5 years). Plugging in the values: A = 600(1 + 0.08/4)^(4*5) = 600(1 + 0.02)^20 ≈ $891.57.

Question 10

Find the compound interest earned. Round to the nearest cent.
-$14,000 at 5% compounded annually for 3 years

Accepted Answer

Using the formula for compound interest, 
$A=P(1+r/n)^(nt) where 
A is the ending amount, 
P is the principal or starting amount, 
r is the annual interest rate, 
n is the number of times the interest is compounded per year, 
and t is the number of years

We have:
P = $14,000 
r = 5% or 0.05 
n = 1 (since interest is compounded annually) 
t = 3

Therefore, 
A = $14,000(1+0.05/1)^(1*3) 
A = $16,206.75

The interest earned is 
A - P = $16,206.75 - $14,000 = $2206.75

Rounding to the nearest cent gives us $2206.75, which is answer choice D.

Question 11

Solve the problem.
-Jennifer invested $6000 in her savings account for 7 years.When she withdrew it,she had $9004.82.Interest was compounded continuously.What was the interest rate on the account? Round to the nearest tenth of a percent.

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-Jennifer invested $6000 in her...

Question 12

Solve the problem. Assume that the minimum payment on a credit card is the greater of $27 or 3% of the unpaid balance.
-Find the minimum payment on an unpaid balance of $1584.40.

Accepted Answer

To find the minimum payment, we need to check which is greater between $27 and 3% of $1584.40.
3% of $1584.40 = 0.03 x $1584.40 = $47.53
Since $47.53 is greater than $27, the minimum payment on an unpaid balance of $1584.40 is $47.53. Therefore, the best choice is B).

Question 13

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing cycle. Use a 365-day year.
-Month: May (31 days)Previous month's balance: $960

Accepted Answer

First, we calculate the average daily balance for the month of May:

Average daily balance = (previous month's balance x number of days in billing cycle + current month's balance x number of days in billing cycle) / number of days in billing cycle

= (960 x 31 + 0 x 0) / 31

= $960

Next, we can use the following formula to calculate the interest charged:

Interest charged = average daily balance x daily interest rate x number of days in billing cycle

We need to find the daily interest rate, which is the annual interest rate divided by the number of days in a year:

Daily interest rate = (18% / 100) / 365

= 0.000493

Finally, we can plug in the values:

Interest charged = 960 x 0.000493 x 31

= $11.31

Therefore, the answer is C) $11.31.

Question 14

Solve the problem. Assume that the minimum payment on a credit card is the greater of $27 or 3% of the unpaid balance.
-Find the minimum payment on an unpaid balance of $787.71.

Accepted Answer

The answer of Solve the problem. Assume that the minimum...

Question 15

Provide an appropriate response.
-An investor purchased 150 shares of a stock at $15.80 per share.The investor holds the stock for 39 weeks and then sells the stock for $19.25 per share.Use the commission schedule for this company given below to find the annual rate of interest earned by this investor.Express your answer as a percentage,correct to one decimal place.

Accepted Answer

The answer of Provide an appropriate response.
-An investor purchased 150...

Question 16

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing cycle. Use a 365-day year.
-Month: July (31 days)

Accepted Answer

The answer of Use the average daily balance method to...

Question 17

Find the compound interest earned. Round to the nearest cent.
-$700 at 8% compounded semiannually for 4 years

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The answer of Find the compound interest earned. Round to...

Question 18

Solve the problem.
-How long will it take for $3000 to grow to $22,600 at an interest rate of 3.1% if the interest is compounded continuously? Round the number of years to the nearest hundredth.

Accepted Answer

To solve this problem, we use the formula for continuous compounding interest: $A = Pe^{rt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (decimal), $t$ is the time the money is invested for in years, and $e$ is the base of the natural logarithm, approximately equal to 2.71828. We are given $A = \$22,600$, $P = \$3,000$, and $r = 3.1\% = 0.031$, and we need to solve for $t$. Rearranging the formula to solve for $t$, we get $t = \frac{\ln(A/P)}{r}$. Plugging in the given values: $t = \frac{\ln(22600/3000)}{0.031}$, which calculates to approximately 65.14 years.

Question 19

Solve the problem. Assume that the minimum payment on a credit card is the greater of $27 or 3% of the unpaid balance.
-If the annual interest rate is 15.99%,find the difference between the minimum payment and the interest owed on an unpaid balance of $748.44 that is 1 month overdue.

Accepted Answer

First, we need to calculate the minimum payment. We take 3% of $748.44, which is $22.45. Since $27 is greater than $22.45, the minimum payment is $27.

Next, we need to calculate the interest owed. To do this, we first find the monthly interest rate:

15.99% / 12 = 1.33%

Next, we find the interest owed for the one month that the balance is overdue:

$748.44 x 1.33% = $9.96

Finally, we take the difference between the minimum payment and the interest owed:

$27 - $9.96 = $17.03

Therefore, the difference between the minimum payment and the interest owed on an unpaid balance of $748.44 that is 1 month overdue is $17.03. The minimum payment is the greater of $27 or 3% of the unpaid balance, which is $22.45. Therefore, the minimum payment is $27.

To find the interest owed, we first need to calculate the monthly interest rate:

15.99% / 12 = 1.33%

Next, we need to find out how much interest is owed on the unpaid balance of $748.44 for one month:

$748.44 x 1.33% = $9.96

The difference between the minimum payment of $27 and the interest owed of $9.96 is:

$27 - $9.96 = $17.04

Rounded to the nearest cent, the answer is $17.03. Therefore, the best choice is C.

Question 20

What is the annual percentage yield (APY) for money invested at the given annual rate? Round results to the nearest hundredth of a percent.
-5% compounded semiannually

Accepted Answer

The APY can be calculated using the formula for compound interest: APY = (1 + r/n)^(n*t) - 1, where r is the annual interest rate (as a decimal), n is the number of compounding periods per year, and t is the time in years. For 5% compounded semiannually, r = 0.05, n = 2, and t = 1. Plugging these values into the formula gives APY = (1 + 0.05/2)^(2*1) - 1 = 1.025^2 - 1 = 1.050625 - 1 = 0.050625 or 5.06% when converted to a percentage and rounded to the nearest hundredth.

Quiz 3: Mathematics of Finance

Find the compound interest earned. Round to the nearest cent. -$600 at 5% compounded quarterly for years

Provide an appropriate response. -An investment company pays 7% compounded quarterly.What is the effective rate? (Compute the answer to two decimal places).

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing cycle. Use a 365-day year. -Month: April (30 days) Previous month's balance: $960 Interest rate: 21%

Provide an appropriate response. -How much should you invest now at 6% compounded semiannually to have $8,500 to buy a car in 2.5 years?

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing cycle. Use a 365-day year. -Month: February (28 days) Previous month's balance: $1240 Interest rate: 22%

Find the compound amount for the deposit. Round to the nearest cent. -$15,000 at 10% compounded semiannually for 10 years

Provide an appropriate response. -What amount will be in an account after 1.5 years if $4,000 is invested at 5% compounded semiannually?

Find the compound amount for the deposit. Round to the nearest cent. -$1100 at 3% compounded quarterly for 2 years

Find the compound amount for the deposit. Round to the nearest cent. -$600 at 8% compounded quarterly for 5 years

Find the compound interest earned. Round to the nearest cent. -$14,000 at 5% compounded annually for 3 years

Solve the problem. -Jennifer invested $6000 in her savings account for 7 years.When she withdrew it,she had $9004.82.Interest was compounded continuously.What was the interest rate on the account? Round to the nearest tenth of a percent.

Solve the problem. Assume that the minimum payment on a credit card is the greater of $27 or 3% of the unpaid balance. -Find the minimum payment on an unpaid balance of $1584.40.

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing cycle. Use a 365-day year. -Month: May (31 days) Previous month's balance: $960

Solve the problem. Assume that the minimum payment on a credit card is the greater of $27 or 3% of the unpaid balance. -Find the minimum payment on an unpaid balance of $787.71.

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing cycle. Use a 365-day year. -Month: July (31 days)

Find the compound interest earned. Round to the nearest cent. -$700 at 8% compounded semiannually for 4 years

Solve the problem. -How long will it take for $3000 to grow to $22,600 at an interest rate of 3.1% if the interest is compounded continuously? Round the number of years to the nearest hundredth.

Solve the problem. Assume that the minimum payment on a credit card is the greater of $27 or 3% of the unpaid balance. -If the annual interest rate is 15.99%,find the difference between the minimum payment and the interest owed on an unpaid balance of $748.44 that is 1 month overdue.

What is the annual percentage yield (APY) for money invested at the given annual rate? Round results to the nearest hundredth of a percent. -5% compounded semiannually