Question 1

Federal Savings Bank is offering a 6-month CD (certificate of deposit) with an annual percentage rate of 6.3% compounded continuously. What is the equivalent annual percentage rate compounded annually or APY (annual percentage yield) on the CD? Give your answer as a percentage rounded to the nearest hundredth of a percent. 
A) 6.28%
B) 6.32%
C) 6.50%
D) 6.53%
E) None of the above.

Accepted Answer

The formula for continuous compounding is A = Pe^(rt). To find the APY, we use e^(0.063) - 1, which gives approximately 0.0650 or 6.50%.

Question 2

The local Rent-to-Own Store offers you the following plan to purchase a bedroom set. The bedroom room set retails for $2350, but you will have two years to pay it off using a simple interest loan. If you pay back $2560, then what was the APR on this loan? Give your answer as a percentage rounded to the nearest tenth of a percent. 
A) 4.5%
B) 4.9%
C) 5.2%
D) 5.6%
E) None of the above.

Accepted Answer

The correct answer is A.The amount of interest paid is $2560 - $2350 = $210. The amount of time is 2 years. The principal is $2350. The APR is $210 / $2350 * 100 / 2 = 4.5%.

Question 3

You purchase a new car after graduating from college. Each year the assessed value of the car decreases by 6%. After five years, what is the total percentage decrease on the value of the car? Give
Your answer as a percentage rounded to the nearest tenth of a percent.
A) 25.0%
B) 26.6%
C) 30.0%
D) 33.4%
E) None of the above.

Accepted Answer

The answer of You purchase a new car after graduating...

Question 4

A shirt is marked off by 30% and you also have a cupon that allows you to take another 20% off ofthe sale price . id you purchased the shirt for 10$ , then what was the original price prior to the 30% mark-down?
A)  $14.67
B)  $16.86
C)  $17.86
D)  $166.67
E)  None of the above.

Accepted Answer

To find the original price, let the original price be x. After a 30% discount, the price becomes 0.7x. Then, applying a 20% discount on the sale price, the final price is 0.8 * 0.7x = 0.56x. Given that the final price is $10, we solve 0.56x = 10, which gives x = $17.86.

Question 5

Miah and Lisa, and their two dogs, decide to purchase a new home. The purchase price of the home is $320000. Miah and Lisa have decided to make a down payment of 30% and finance the remaining amount with a 15-year home mortgage loan with an annual percentage rate of 3.15% compounded monthly. Compute Miah and Lisa's monthly mortgage payment under this loan. Give your answer as a decimal rounded to the nearest hundredth.
A) $1007.26
B) $1256.84
C) $1493.95
D) $1563.11
E) None of the above.

Accepted Answer

The answer of Miah and Lisa, and their two dogs,...

Question 6

At the end of each month you deposit $250 into an account which earns an annual percentage rate of 6% compounded monthly. How much money will you have in the account after 40 years? Give your answer as a decimal rounded to the nearest hundredth. 
A) $120000.00
B) $315473.28
C) $497872.68
D) $589545.27
E) None of the above.

Accepted Answer

The future value of a series of monthly deposits can be calculated using the future value of an annuity formula: FV = P * [((1 + r)^nt - 1) / r], where P is the monthly deposit, r is the monthly interest rate, n is the number of times the interest is compounded per year, and t is the number of years. Here, P = $250, r = 0.06/12, n = 12, and t = 40. Plugging in these values gives approximately $497872.68.

Question 7

An electronics store purchases a certain video game from the manufacturer for $10 per unit. The store sells the game at a mark-up of 80% over the purchase price. You found a coupon, offered in the local newspaper, which will reduce the price by 10%. How much money would the store profit if you purchased the video game using the coupon? Give your answer as a decimal rounded to the nearest hundredth.
A) $6.20
B) $8.50
C) $4.40
D) $7.70
E) None of the above.

Accepted Answer

The store sells the game for $18 (80% markup on $10). With a 10% coupon, the price is reduced to $16.20. The profit is $16.20 - $10 = $6.20.

Question 8

After some questionable activity during your college's annual homecoming party, your friends need to bail you out of jail. A bail bondsman loans your friends $5000 with the condition that they will repay the loan along with 15¼ % annual simple interest. After six months you go to pay the loan, how much will you owe? Give your answer as a decimal rounded to the nearest hundredth.
A) $5123.50
B) $5381.25
C) $8932.75
D) $9575.00
E) None of the above.

Accepted Answer

The simple interest for six months is calculated as $5000 * 0.1525 * (6/12) = $381.25. Adding this to the principal amount of $5000 gives a total of $5381.25.

Question 9

Bill and Seth have decided to open a 30-year home mortgage loan with an annual percentage rate of 3.80% compounded monthly. If the home costs $240,000.00 and Bill and Seth agree to pay a 10% down-payment up front, then compute Bill and Seth’s monthly mortgage payment. Give your answer as a decimal rounded to the nearest hundredth.
A) $880.13 
B) $912.15
C) $942.13
D) $1006.47
E) None of the above.

Accepted Answer

The answer of Bill and Seth have decided to open...

Question 10

Starting at the age of 30, at the end of each month, you invest $540 into a retirement IRA (individual retirement account). The IRA guarantees an APR of 9% compounded monthly for the life of the account. How much money will you have in the account when you turn 65? Give your answer as a decimal rounded to the nearest hundredth. 
A) $504000.00
B) $1588563.62
C) $1708965.24
D) $1974965.87
E) None of the above.

Accepted Answer

The future value of an annuity is given by the formula:FV = P * (((1 + r/n)^(n*t)) - 1) / (r/n))where:P is the periodic paymentr is the annual interest raten is the number of compounding periods per yeart is the number of yearsIn this case, we have:P = $540r = 9% = 0.09n = 12 (monthly compounding)t = 35 (65 - 30)Plugging these values into the formula, we get:FV = 540 * (((1 + 0.09/12)^(12*35)) - 1) / (0.09/12))= 540 * (((1.0075)^420) - 1) / (0.0075))= 540 * (2.999 - 1) / (0.0075)= 540 * 1.999 / 0.0075= $1,588,563.62Therefore, the correct answer is B) $1,588,563.62.

Question 11

After several sleepless nights of on-line poker you've made quite a bit of money. You deposit the money into a brand new savings account which offers an annual percentage rate of 5¾% compounded weekly. You forget about the account and five years later find that it contains $20200. How much money did you originally deposit into the account? Give your answer as a decimal rounded to the nearest hundredth.
A) $14252.23
B) $15252.15
C) $18214.15
D) $15155.17
E) None of the above.

Accepted Answer

The answer of After several sleepless nights of on-line poker...

Question 12

After several sleepless nights of on-line poker you've made $4000. You deposit the money into a brand new savings account which offers an annual percentage rate of 5¾% compounded daily. How much will you have in the account after five years? Give your answer as a decimal rounded to the nearest hundredth. 
A) $5026.85
B) $5332.24
C) $5475.43
D) $6117.92
E) None of the above.

Accepted Answer

The answer of After several sleepless nights of on-line poker...

Question 13

The local Rent-to-Own Store offers you the following plan to purchase a washing machine. The washing machine retails for $675, but you will have three years to pay it off using a simple interest Loan. If you pay back $950, then what was the APR on this loan? Give your answer as a percentage
Rounded to the nearest tenth of a percent.
A) 9.1%
B) 10.4%
C) 13.6%
D) 16.2%
E) None of the above.

Accepted Answer

The simple interest formula is I = PRT. Here, I = $950 - $675 = $275, P = $675, and T = 3 years. Solving for R gives R = I / (PT) = $275 / ($675 * 3) = 0.1358, which is approximately 13.6% when converted to a percentage.

Question 14

After some questionable activity during your college's annual homecoming party, your friends need to bail you out of jail. A bail bondsman loans your friends $8000 with the condition that they will repay the loan along with 25¾% annual simple interest. After eight months you go to pay the loan, how much will you owe? Give your answer as a decimal rounded to the nearest hundredth. 
A) $8135.15
B) $8137.33
C) $9621.76
D) $9648.00
E) None of the above.

Accepted Answer

The answer of After some questionable activity during your college's...

Question 15

Your university charges an annual room and board fee of $4200. You choose the deluxe meal program, so your room and board fee is increased by 15%. What will be your increased room and board fee? Give your answer as a decimal rounded to the nearest hundredth. 
A) $4626.00
B) $4750.00
C) $4830.00
D) $5052.00
E) None of the above.

Accepted Answer

The answer of Your university charges an annual room and...

Question 16

Federal Savings Bank is offering a 6-month CD (certificate of deposit) with an annual percentage rate of 4.5% compounded daily. What is the equivalent annual percentage rate compounded annually or APY (annual percentage yield) on the CD? Give your answer as a percentage rounded to the nearest tenth of a percent. 
A) 4.7%
B) 4.8%
C) 4.9%
D) 5.0%
E) None of the above.

Accepted Answer

The answer of Federal Savings Bank is offering a 6-month...

Question 17

An electronics store purchases a certain video game from the manufacturer, but in a mass amount of clutter the original purchase price is lost. The store sells the game at a mark-up of 200% over the purchase price. A coupon which the store offers in the local newspaper will reduce the price by 20%. With the coupon, the profit made on the sale of the video game is $18. What was the original purchase price of the video game? Give your answer as a decimal rounded to the nearest hundredth. 
A) $8.00
B) $16.25
C) $12.45
D) $12.86
E) None of the above.

Accepted Answer

Let $x$ be the original purchase price. The store sells the game at a 200% markup, so the selling price is $x + 2x = 3x$. A 20% discount on the selling price is $0.8 \times 3x = 2.4x$. The profit with the coupon is thus $2.4x - x = 1.4x = $18$. Solving for $x$, we get $x = \frac{18}{1.4} = 12.8571$, which rounds to $12.86.

Question 18

Your university charges an annual tuition of $9600. If you agree to take part in a work-study program, your annual tuition is only $8200. What is the percentage decrease in the tuition if you take part in the Work-study program? Give your answer as a percentage rounded to the nearest tenth of a percent.
A) 9.7%
B) 11.8%
C) 13.1%
D) 14.6%
E) None of the above.

Accepted Answer

The answer of Your university charges an annual tuition of...

Question 19

You purchase a five-year savings bond. The value of the increases by 5% each year. After five years, what is the total percentage increase from the bond's initial value? Give your answer as a percentage rounded to the nearest tenth of a percent. 
A) 25.0%
B) 25.8%
C) 27.6%
D) 28.4%
E) None of the above.

Accepted Answer

The bond's value increases by 5% each year, so after five years, the total increase is calculated by (1.05)^5 - 1 = 0.276, which is a 27.6% increase.

Question 20

A store offers a coupon which allows one item to receive a price reduction of 50% off the original price. As a valued shopper, you are also given the option of discounting the reduced price by 10% or
Taking $10 off of the reduced price. Taking $10 off as opposed to the 10% discount off of the reduced Price would be a good idea for which of the following original prices?
A) $100
B) $200
C) $300
D) $400
E) None of the above.

Accepted Answer

After a 50% reduction, the price of a $100 item is $50. A 10% discount on $50 is $5, making the final price $45. Taking $10 off instead would make the final price $40, which is better.

Quiz 10: Financial Mathematics: Money Matters

You purchase a new car after graduating from college. Each year the assessed value of the car decreases by 6%. After five years, what is the total percentage decrease on the value of the car? Give Your answer as a percentage rounded to the nearest tenth of a percent.

A shirt is marked off by 30% and you also have a cupon that allows you to take another 20% off ofthe sale price . id you purchased the shirt for 10$ , then what was the original price prior to the 30% mark-down?

At the end of each month you deposit $250 into an account which earns an annual percentage rate of 6% compounded monthly. How much money will you have in the account after 40 years? Give your answer as a decimal rounded to the nearest hundredth.

Your university charges an annual room and board fee of $4200. You choose the deluxe meal program, so your room and board fee is increased by 15%. What will be your increased room and board fee? Give your answer as a decimal rounded to the nearest hundredth.

You purchase a five-year savings bond. The value of the increases by 5% each year. After five years, what is the total percentage increase from the bond's initial value? Give your answer as a percentage rounded to the nearest tenth of a percent.