# week 5 quiz

1.Find the simple interest on a \$400 investment made for 5 years at an interest rate of 7%/year. What is the accumulated amount?A) The simple interest is \$140, the accumulated amount is \$540.B) The simple interest is \$115, the accumulated amount is \$515.C) The simple interest is \$120, the accumulated amount is \$520.D) The simple interest is \$125, the accumulated amount is \$555.2.If the accumulated amount is \$3,720 at the end of 3 years and the simple rate of interest is 8%/year, what is the principal?A) The principal is \$3,500.B) The principal is \$3,360.C) The principal is \$3,000.D) The principal is \$3,200.3.Find the accumulated amount A if the principal P = \$2,000 is invested at the interest rate of r = 6% per year for t = 6 years, compounded annually.A) The accumulated amount is \$3,508.28.B) The accumulated amount is \$3,194.16.C) The accumulated amount is \$2,837.04.D) The accumulated amount is \$2,708.89.4.Find the accumulated amount A if the principal P = \$11,000 is invested at the interest rate of r = 5% per year for t = 5.5 years, compounded quarterly.A) The accumulated amount is \$14,585.32.B) The accumulated amount is \$13,785.93.C) The accumulated amount is \$14,100.05.D) The accumulated amount is \$14,457.17.5.Determine the simple interest rate at which \$1,500 will grow to \$1,550 in the 8 months. Round your answers to the nearest tenth of percent.A) The interest rate is 5%/year.B) The interest rate is 4.33%/year.C) The interest rate is 4.76%/year.D) The interest rate is 66.67%/year.E) The interest rate is 3.06%/year.6.Find the present value of \$40,000 due in 4 years at the given rate of interest 8%/year compounded monthly.A) The present value is \$28,948.67.B) The present value is \$29,433.94.C) The present value is \$29,076.82.D) The present value is \$29,748.06.7.In order to help finance the purchase of a new house, the Abdullahs have decided to apply for a short-term loan (a bridge loan) in the amount of \$140,000 for a term of 1 mo. If the bank charges simple interest at the rate of 12%/year, how much will the Abdullahs owe the bank at the end of the term?A) \$141,400B)\$140,012C) \$146,800D) \$144,9008.The Kwans are planning to buy a house 6 years from now. Housing experts in their area have estimated that the cost of a home will increase at a rate of 6%/year during that period. If this economic prediction holds true, how much can the Kwans expect to pay for a house that currently costs \$160,000?A) \$218,199B) \$221,562C) \$230,490D) \$226,9639.The manager of a money market fund has invested \$4.2 million in certificates of deposit that pay interest at the rate of 5.4%/year compounded quarterly over a period of 5 years. How much will the investment be worth at the end of 5 years?A) 5,491,921.88B) 3,211,990.34C) 1,291,921.88D) 12,024,347.2010.Find the effective rate corresponding to nominal rate 6% / year compounded monthly. Round the answers to the nearest hundredth of percent.A) 6.538%B) 5.858%C) 6.598%D) 6.168%11.Find the interest rate needed for an investment of \$4,000 to grow to an amount of \$5,000 in 4 yr if interest is compounded continuously. Please round the answer to the nearest hundredth of percent.A) 5.58 %/yrB) 5.70 %/yrC) 6.63 %/yrD) 5.01 %/yrE) 5.92 %/yr12.Anthony invested a sum of money 6 yr ago in a savings account that has since paid interest at the rate of 7%/year compounded quarterly. His investment is now worth \$19,713.77. How much did he originally invest? Please round the answer to the nearest cent.A) \$13,000.01B) \$12,500.01C) \$14,000.01D) \$11,500.01E) \$11,000.0113.Georgia purchased a house in 1998 for \$220,000. In 2003 she sold the house and made a net profit of \$50,000. Find the effective annual rate of return on her investment over the 5-yr period. Please round the answer to the nearest tenth of percent.A) 3.7%/yrB) 3.1%/yrC) 4.4%/yrD) 4.2%/yrE) 5.6%/yr14.Find the amount of an ordinary annuity of 10 yearly payments of \$1,800 that earn interest at 10% per year, compounded annually.A) \$4,668.74B) \$28,687.36C) \$87,798.04D) \$3,600.0015.Robin, who is self-employed, contributes \$4,000/year into a Keogh account. How much will he have in the account after 15 years if the account earns interest at the rate of 6.5%/year compounded yearly?A) \$96,728.68B) \$10,287.36C) \$158,267.14D) \$3,771.2816.If a merchant deposits \$1,500 annually at the end of each tax year in an IRA account paying interest at the rate of 10%/year compounded annually, how much will she have in her account at the end of 25 years? Round your answer to two decimal places.A) \$16,252.06B) \$147,520.59C) \$5,250.00D) \$34,663.6517.Find the present value of an ordinary annuity of \$600 payments each made quarterly over 5 years and earning interest at 4% per year compounded quarterly.A) \$8,154.20B) \$2,671.09C) \$10,827.33D) \$56,916.8718.Juan invested \$24,000 in a mutual fund 5 years ago. Today his investment is worth \$34,616. Find the effective annual rate of return on his investment over the 5-year period.A) 10.3%/yearB) 8%/yearC) 83%/yearD) 8.3%/year19.Find the amount of an ordinary annuity for 5 years of quarterly payments of \$2,200 that earn interest at 4% per year compounded quarterly.A) \$11,222.21B) \$65,511.77C) \$48,441.81D) \$2,684.4220.Find the present value of the ordinary annuity. Please round the answer to the nearest cent.\$2,000 per semiannual period for 7 yr at 12%/year compounded semiannuallyA) P = \$18,589.97B) P = \$17,913.54C) P = \$20,003.52D) P = \$13,147.80E) P = \$9,629.07