Financial Applications Question Preview (ID: 8044)


Chapter 7 Financial Applications Review. TEACHERS: click here for quick copy question ID numbers.

Heather deposits $200 per week for 20 years into an account that earns 2.6% annual interest, compounded weekly. Find the amount of the annuity, and the amount of interest earned.
a) $271,789.92; $73, 523.29
b) $272,723.63; $64,723.63
c) $304, 879.28; $93,529.20
d) $311,942.21; $98,202.24

Niki needs $5200 for university tuition in 2 years. She makes deposits into an account that earns 6.5% per year, compounded bi-weekly. How much should she deposit every 2 weeks?
a) $98.43
b) $92.47
c) $90.01
d) $93.77

Suki wants to withdraw $800 per month for the next 20 years. The interest in her account is 6.25% per year, compounded monthly. How much must Suki deposit today to finance this?
a) $109,449.87
b) $103,594.29
c) $98,999.23
d) $87,378.87

The future value of a $200 deposit in an account that earns 6.25% annual interest is $272.71 after 5 years. Determine the compounding period for this investment.
a) annually
b) semi-annually
c) quarterly
d) weekly

Marko deposits $400 into an account at the end of every month for 8 years. Interest is earned at 5.5%, compounded monthly. Find the amount of both the annuity and interest earned.
a) $42,738.55; $8,345.28
b) $48,100.11; $9,700.11
c) $52,456.22; $10,200.23
d) $44,629.10; $8,789.92

Yuri deposits $850 into an account that earns 6.25% per year simple interest. How long will it take for the amount in this account to reach $1000?
a) 3 years, 2 months
b) 2 years, 5 months
c) 1 year, 9 months
d) 2 years, 10 months

An account with an initial value of $1000 earns 3% interest per year, compounded semi-annually. The shape of the graph of amount versus time is
a) linear
b) parabolic
c) cubic
d) exponential

Steve deposits $835 into an account that earns 8.25% per year, compounded annually. How much interest will have been earned after 5 years?
a) $406.15
b) $410.76
c) $401.11
d) $415.67

Five years ago, money was invested at 7% per year, compounded annually. Today the investment is worth $441.28. How much interest was earned on the original investment?
a) $78.35
b) $107.29
c) $126.65
d) $153.39

Wayne is 16 years old. To become a millionaire by the time he is 50 years old, how much does Wayne need to invest, semi-annually, at 4% per year compounded semi-annually?
a) $7031.73
b) $6203.56
c) $9801.67
d) $11,247.89

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