Question 1

A condominium complex was purchased by a group of private investors for $1.5 million and sold 5 year(s) later for $3.7 million.Find the annual rate of return (compounded continuously) on their investment.
A)18.06%
B)18.47%
C)18.90%
D)18.19%

Accepted Answer

The answer of A condominium complex was purchased by a...

Question 2

Find the effective rate corresponding to the given nominal rate.Round your answers to three decimal places. 8% / year compounded monthly  _____%
8% / year compounded daily  _____%
A)8.328%, 8.243%
B)8.243%, 8.000%
C)8.328%, 8.000%
D)8.300%, 8.328%

Accepted Answer

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Question 3

The Estradas are planning to buy a house 4 year(s) from now.Housing experts in their area have estimated that the cost of a home will increase at a rate of 8% / year during that 4-year period.If this economic prediction holds true, how much can they expect to pay for a house that currently costs $40,000? Round your answer to two decimal places.
A)$54,742.76
B)$54,419.56
C)$55,026.64
D)$55,085.11

Accepted Answer

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Question 4

How long will it take an investment of $9,000 to double if the investment earns interest at the rate of 9% / year compounded monthly?
A)7.5 year(s)
B)7.8 year(s)
C)7.7 year(s)
D)8.0 year(s)

Accepted Answer

We can use the formula $A=P(1+r/n)^{nt}$, where A is the amount after t years, P is the initial investment, 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 want to solve for t when A=2P and plug in the given values.

$2P = 9000(1+0.09/12)^{12t}$

$2 = (1.0075)^{12t}$

$\log{(2)} = 12t\log{(1.0075)}$

$t = \frac{\log{(2)}}{12\log{(1.0075)}} \approx 7.7$

Therefore, the answer is C, 7.7 year(s).

Question 5

At an annual inflation rate of 5.5%, how long will it take the Consumer Price Index (CPI) to double?
A)12.63 year(s)
B)12.95 year(s)
C)12.78 year(s)
D)12.69 year(s)

Accepted Answer

The rule of 72 is a quick way to estimate the time it will take for an investment to double in value, given a fixed annual rate of interest. To apply the rule of 72 to inflation, we can divide 72 by the annual inflation rate. In this case, 72/5.5 = 13.09 years. Therefore, it would take approximately 13.09 years for the CPI to double. Since none of the choices are exactly 13.09, we choose the closest one, which is B, 12.95 year(s).

Question 6

Find the present value of $50,000 due in 3 year(s) at the given rate of interest. 5% / year compounded monthly __________
9% / year compounded daily __________
A)$43,049, $38,170
B)$43,049, $58,074
C)$38,170, $58,074
D)$43,049, $65,496

Accepted Answer

The answer of Find the present value of $50,000 due...

Question 7

How long will it take an investment of $4,000 to triple if the investment earns interest at the rate of 6% /year compounded daily?
A) 
B) 
C) 
D) 
E)

Accepted Answer

The answer of How long will it take an investment...

Question 8

Find the interest rate needed for an investment of $5,000 to grow to an amount of $7,500 in 3 year(s) if interest is compounded quarterly.Round your answer to two decimal places.
A) 
B) 
C) 
D) 
E)

Accepted Answer

The answer of Find the interest rate needed for an...

Question 9

Bernie invested a sum of money 7 year(s) ago in a savings account, which has since paid interest at the rate of 8% / year compounded quarterly.His investment is now worth $22,608.44.How much did he originally invest?
A) 
B) 
C) 
D) 
E)

Accepted Answer

We can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (the original investment), r is the annual interest rate (as a decimal), n is the number of times the interest is compounded per year, and t is the number of years.

In this case, we know that A = $22,608.44, r = 8% = 0.08 (since it's annual, we don't need to adjust for quarterly compounding), n = 4 (since it's compounded quarterly), and t = 7.

So we can solve for P:

$22,608.44 = P(1 + 0.08/4)^(4*7)
$22,608.44 = P(1.02)^28
$22,608.44 = P*1.856561
P = $12,166.19

Therefore, Bernie originally invested $12,166.19.

Question 10

Eleni, who is now 55 years old, is employed by a firm that guarantees her a pension of $40,000/year at age 65.What is the present value of her first year's pension if inflation over the next 10 year(s) is at the given rate.Assume that inflation is continuously compounded. 4% _________
8% _________
19% _________
A)$32,749.23, $34,142.61, $5,982.74
B)$32,749.23, $32,749.23, $5,982.74
C)$32,749.23, $32,749.23, $34,142.61
D)$26,812.80, $17,973.16, $5,982.74

Accepted Answer

The answer of Eleni, who is now 55 years old,...

Question 11

How long will it take $5,000 to grow to $6,500 if the investment earns interest at the rate of 13% / year compounded monthly?
A)1.9 year(s)
B)1.7 year(s)
C)1.6 year(s)
D)2.0 year(s)

Accepted Answer

The answer of How long will it take $5,000 to...

Question 12

A condominium complex was purchased by a group of private investors for $1.3 million and sold 6 year(s) later for $3.4 million.Find the annual rate of return (compounded continuously) on their investment.
A)16.14% per year
B)16.18% per year
C)16.10% per year
D)16.06% per year
E)16.02% per year

Accepted Answer

The answer of A condominium complex was purchased by a...

Question 13

Find the present value of $57,939 due in 6 year(s) at an interest rate of 9% / year compounded continuously.Round your answer to the nearest integer.
A)$34,547
B)$33,766
C)$34,165
D)$33,764

Accepted Answer

The present value can be found using the formula $A=e^{rt}$ where $A$ is the future value, $r$ is the interest rate, and $t$ is the time in years. Plugging in the values, we get $A=57,939$, $r=0.09$, and $t=6$. Therefore, $PV=\frac{A}{e^{rt}}=\frac{57,939}{e^{0.54}}\approx33,763.87$. Rounding to the nearest integer, the answer is $\boxed{	extbf{(D)}\ 33,764}$.

Question 14

Find the interest rate needed for an investment of $5,000 to grow to an amount of $7,000 in 4 year(s) if interest is compounded continuously.
A)8.55% per year
B)8.41% per year
C)8.48% per year
D)8.62% per year
E)8.69% per year

Accepted Answer

The answer of Find the interest rate needed for an...

Question 15

Online retail sales stood at $23.5 billion for 2000.For the next 2 years, they grew by 33% and 27.6% per year, respectively.For the next 6 years, online retail sales are projected to grow at 30.2%, 19.8%, 24.9%, 13.8%, 17.4%, and 10.4% per year, respectively.What are the projected online sales for 2008?
A)  billion
B)  billion
C)  billion
D)  billion
E)  billion

Accepted Answer

The answer of Online retail sales stood at $23.5 billion...

Question 16

Find the interest rate needed for an investment of $3,000 to grow to an amount of $7,500 in 3 year(s) if interest is compounded monthly.Round your answer to two decimal places.
A)31.13%
B)31.74%
C)30.94%
D)30.56%

Accepted Answer

The answer of Find the interest rate needed for an...

Question 17

How long will it take an investment of $7,000 to double if the investment earns interest at the rate of 7% compounded continuously? Round your answer to two decimal places.
A)  year(s)
B)  year(s)
C)  year(s)
D)  year(s)
E)  year(s)

Accepted Answer

The answer of How long will it take an investment...

Question 18

Find the accumulated amount after 3 year(s) if $6,000 is invested at 8% compounded continuously.
A)$7,627.49
B)$7,591.91
C)$7,609.45
D)$7,621.42

Accepted Answer

Using the formula $A= Pe^{rt}$ where $P$ is the principal, $r$ is the annual interest rate, $t$ is the time in years, and $A$ is the accumulated amount.

$P= 6000, r= 8\%, t= 3$ years

$A= 6000e^{0.08\cdot3}= \$7,627.49$

Therefore, the answer is choice letter A.

Question 19

Julio purchased 1,400 shares of a certain stock for $22,750 (including commissions).He sold the shares 6 year(s) later and received $32,100 after deducting commissions.Find the effective annual rate of return on his investment over the 6-year period.
A)5.75%
B)5.78%
C)5.82%
D)5.91%

Accepted Answer

The answer of Julio purchased 1,400 shares of a certain...

Question 20

Having received a large inheritance, a child's parents wish to establish a trust for the child's college education.If 5 year(s) from now they need an estimated $60,000, how much should they set aside in trust now, if they invest the money at the given rate of interest. 17.5% compounded quarterly _________
17)5% compounded continuously _________
A)$25,481.29, $25,170.27
B)$25,170.27, $25,933.35
C)$25,481.29, $25,011.72
D)$25,011.72, $25,170.27

Accepted Answer

The answer of Having received a large inheritance, a child's...

Quiz 5: Exponential and Logarithmic Functions

A condominium complex was purchased by a group of private investors for $1.5 million and sold 5 year(s) later for $3.7 million.Find the annual rate of return (compounded continuously) on their investment.

Find the effective rate corresponding to the given nominal rate.Round your answers to three decimal places. 8% / year compounded monthly _% 8% / year compounded daily _%

How long will it take an investment of $9,000 to double if the investment earns interest at the rate of 9% / year compounded monthly?

At an annual inflation rate of 5.5%, how long will it take the Consumer Price Index (CPI) to double?

Find the present value of $50,000 due in 3 year(s) at the given rate of interest. 5% / year compounded monthly 9% / year compounded daily

How long will it take an investment of $4,000 to triple if the investment earns interest at the rate of 6% /year compounded daily?

Find the interest rate needed for an investment of $5,000 to grow to an amount of $7,500 in 3 year(s) if interest is compounded quarterly.Round your answer to two decimal places.

Bernie invested a sum of money 7 year(s) ago in a savings account, which has since paid interest at the rate of 8% / year compounded quarterly.His investment is now worth $22,608.44.How much did he originally invest?

Eleni, who is now 55 years old, is employed by a firm that guarantees her a pension of $40,000/year at age 65.What is the present value of her first year's pension if inflation over the next 10 year(s) is at the given rate.Assume that inflation is continuously compounded. 4% _____ 8% _ 19% _____

How long will it take $5,000 to grow to $6,500 if the investment earns interest at the rate of 13% / year compounded monthly?

A condominium complex was purchased by a group of private investors for $1.3 million and sold 6 year(s) later for $3.4 million.Find the annual rate of return (compounded continuously) on their investment.

Find the present value of $57,939 due in 6 year(s) at an interest rate of 9% / year compounded continuously.Round your answer to the nearest integer.

Find the interest rate needed for an investment of $5,000 to grow to an amount of $7,000 in 4 year(s) if interest is compounded continuously.

Find the interest rate needed for an investment of $3,000 to grow to an amount of $7,500 in 3 year(s) if interest is compounded monthly.Round your answer to two decimal places.

How long will it take an investment of $7,000 to double if the investment earns interest at the rate of 7% compounded continuously? Round your answer to two decimal places.

Find the accumulated amount after 3 year(s) if $6,000 is invested at 8% compounded continuously.

Julio purchased 1,400 shares of a certain stock for $22,750 (including commissions) .He sold the shares 6 year(s) later and received $32,100 after deducting commissions.Find the effective annual rate of return on his investment over the 6-year period.

Quiz 5: Exponential and Logarithmic Functions

A condominium complex was purchased by a group of private investors for $1.5 million and sold 5 year(s) later for $3.7 million.Find the annual rate of return (compounded continuously) on their investment.

Find the effective rate corresponding to the given nominal rate.Round your answers to three decimal places. 8% / year compounded monthly _____% 8% / year compounded daily _____%

How long will it take an investment of $9,000 to double if the investment earns interest at the rate of 9% / year compounded monthly?

At an annual inflation rate of 5.5%, how long will it take the Consumer Price Index (CPI) to double?

Find the present value of $50,000 due in 3 year(s) at the given rate of interest. 5% / year compounded monthly __________ 9% / year compounded daily __________

How long will it take an investment of $4,000 to triple if the investment earns interest at the rate of 6% /year compounded daily?

Find the interest rate needed for an investment of $5,000 to grow to an amount of $7,500 in 3 year(s) if interest is compounded quarterly.Round your answer to two decimal places.

Bernie invested a sum of money 7 year(s) ago in a savings account, which has since paid interest at the rate of 8% / year compounded quarterly.His investment is now worth $22,608.44.How much did he originally invest?

How long will it take $5,000 to grow to $6,500 if the investment earns interest at the rate of 13% / year compounded monthly?

A condominium complex was purchased by a group of private investors for $1.3 million and sold 6 year(s) later for $3.4 million.Find the annual rate of return (compounded continuously) on their investment.

Find the present value of $57,939 due in 6 year(s) at an interest rate of 9% / year compounded continuously.Round your answer to the nearest integer.

Find the interest rate needed for an investment of $5,000 to grow to an amount of $7,000 in 4 year(s) if interest is compounded continuously.

Find the interest rate needed for an investment of $3,000 to grow to an amount of $7,500 in 3 year(s) if interest is compounded monthly.Round your answer to two decimal places.

How long will it take an investment of $7,000 to double if the investment earns interest at the rate of 7% compounded continuously? Round your answer to two decimal places.

Find the accumulated amount after 3 year(s) if $6,000 is invested at 8% compounded continuously.

Julio purchased 1,400 shares of a certain stock for $22,750 (including commissions) .He sold the shares 6 year(s) later and received $32,100 after deducting commissions.Find the effective annual rate of return on his investment over the 6-year period.

Find the effective rate corresponding to the given nominal rate.Round your answers to three decimal places. 8% / year compounded monthly _% 8% / year compounded daily _%

Find the present value of $50,000 due in 3 year(s) at the given rate of interest. 5% / year compounded monthly 9% / year compounded daily