MULTIPLE CHOICE QUESTIONS

Multiple Choice Questions

Multiple Choice Questions

Calculate the amount of interest you'll have at the end of the indicated period. You invest $500 in an account that pays simple interest of 2% for 7 years.

A) $142.86

B) $35.71

C) 7.00

D) 70.00

Principal

Rate %

Time

Simple Interest

Compound Amount

Compound Interest

Compound Over Simple

500.00

2.00

7.00

70.00

574.34

74.34

4.34

2) Principal: $720 Rate: 2% Years: 18

A) $49.14

B) $509.94

C) $769.14

D) $43.37

Principal

Rate %

Time

 

Accumalated Balance

720

2

18

 

827.05

3) $15,000 is invested at an APR of 8% for 5 years.

A) $20,407.33

B) $1201.50

C) $22,039.92

D) 6000.00

Principal

Rate %

Time

Accumulated Balance

15000

8

5

22203.66

4) $400 was deposited at an APR of 3% with quarterly compounding for 3 years.

A) $409.07

B) 436.00

C) 437.09

D) 437.52

Principal

Rate %

Time

Compounding Periods (m)

Accumalated Balance

400

3

3

12

437.52

5) $2000 was deposited at an APR of 3% with monthly compounding for 2 years. Find the annual percentage yield (APY).

A) 2010.01

B) 3125.00

C) $1698.81

D) 2123.51

Principal

Rate %

Time

Compounding Periods (m)

Accumalated Balance

Annual % Yield

2000

3

2

24

2123.514089

1.0304160

6) A bank offers an APR of 4.5% compounded semiannually.

A) 4.55%

B) 4.59%

C) 4.58%

D) 4.50%

Principal

Rate %

Time

Compounding Periods (m)

Accumulated Balance

1000

4.5

1

2

$1,094.17

7) A $7000 deposit in an account with an APR of 3.6% compounded continuously for 5 years. Solve the problem.

A) $8380.52

B) $1699.38

C) $7256.59

D) $8354.05

Principal

Rate %

Time

Compounding Periods (m)

Accumalated Balance

7000

3.6

5

continuous

$8,380.52

8) Suppose you start saving today for a $10,000 down payment that you plan to make on a house in 5 years.

A) $8812.82

B) $8741.12

C) $8738.48

D) $8752.82

PV = FV / (1 + r) Y

Principal

Rate %

Time

Compounding Periods (m)

Accumalated Balance

8752.816

2.7

5

0

10000

9) Find the saving plan balance after 10 months with an APR of 3% and monthly payments of $390. Answer the Question.

A) $3352.54

B) $4758.00

C) $3944.17

D) $4044.30

Variables

FV=Future Value of the annuity Pmt=Payment amount K=Annual interest rate N=Number of payments

Montly Payments

APR %

Months

Future Amount

390

3

10

$4,470.91

10) Stephen sets up an IRA with an APR of 4% at age 26. At the end of each month, he deposits $57 in the account. How much will the IRA contain when he reaches 65?

A) $47,628.04, this is $24,828.04 more than the total amount of the deposits.

B) $46,870.08, this is $30,460.28 more than the total amount of the deposits.

C) $64,065.01, this is $37,389.01 more than the total amount of the deposits.

D) $1545.43, this is $63.43 more than the total amount of the deposits. Solve

Montly Payments

APR %

Months

Future Amount

Total - Deposit

57

4

468

64,065.01

37,389.01

11) Calculate the monthly payment for a student loan of $20,934 at a fixed APR of ...