PRINTABLE VERSION Quiz 4 Question 1 Find the accumulated amount at the end of 5 months on a $150 bank deposit paying simple interest at a rate of 6% per year. a) $156.75 b) $151.75 c) $153.75 d) $157.75 e) $155.75 f) None of the above. Question 2 Mr. Smith wishes to retire in 12 years. When he retires he would like to have $100,000 in his bank account. Mr. Smith's bank pays 9% per year compounded annually. How much should he deposit now to attain his goal? a) $35,557.47 b) $35,553.47 c) $35,550.47 d) $35,551.47 e) $35,555.47 f) None of the above. Question 3 A grandmother deposited $5,000 in an account that pays 8% per year compounded annually when her granddaughter was born. What will the value of the account be when the granddaughter reaches her 16th birthday? a) $17,129.71 b) $17,109.71 c) $17,149.71 d) $17,119.71 e) $17,139.71 f) None of the above. Question 4 Jack and Tracy would like to have $7,000 for a down payment on a new condo. A savings account at their local credit union will pay 2% per year compounded monthly. How much should they deposit now in this account to have the down payment in 2 years? a) $6,715.75 b) $6,685.75 c) $6,765.75 d) $6,725.75 e) $6,695.75 f) None of the above. Question 5 Framing Art Inc. will need to purchase two new cashier machines in 2 years, at a cost of $125 each. A savings account pays 3% per year compounded quarterly. How much should Framing Art Inc. deposit now in this account to have the cash available in 2 years to pay cash for both machines? a) $229.49 b) $239.49 c) $241.49 d) $243.49 e) $235.49 f) None of the above. Question 6 John wishes to set up an account for his grandfather so that he can have some extra money each month. John wants his grandfather to be able to withdraw $190 per month for the next 3 years. How much must John invest today at 3% per year compounded monthly so that his grandfather can withdraw $190 per month for the next 3 years? a) $6,563.43 b) $6,533.43 c) $6,513.43 d) $6,553.43 e) $6,543.43 f) None of the above. Question 7 John got a part time weekend job at a local restaurant to save for a new car. He plans on depositing $130 per month for the next 4 years in a savings account with a rate of 7% per year compounded monthly. How much will he have saved toward his down payment at the end of the 4 year period? a) $7,187.20 b) $7,177.20 c) $7,197.20 d) $7,167.20 e) $7,147.20 f) None of the above. Question 8 Fred purchased a new car. His monthly payments are $350 per month. He will be paying on his car for 5 years, and the loan costs 6% per year compounded monthly. What was the original cost of the car? a) $18,103.95 b) $18,102.95 c) $18,105.95 d) $18,101.95 e) $18,099.95 f) None of the above. Question 9 Jackson deposits $160 each month into a savings account earning interest at the rate of 7% per year compounded monthly. How much will he have in this account at the end of 8 years? a) $20,507.81 b) $20,509.81 c) $20,511.81 d) $20,508.81 e) $20,514.81 f) None of the above. Question 10 Esther pays $467 per month for 6 years for a car. She made a down payment of $3,700. If the loan costs 7.1% per year compounded monthly, what was the cash price of the car? a) $31,014.63 b) $45,469.53 c) $23,614.63 d) $27,314.63 e) $38,069.53 f) None of the above. Question 11 You borrowed $14,000 from your bank to build a small cabin on your property. The bank will charge 6% per year compounded quarterly. You decide to payoff this loan in 3 years by making quarterly payments. How much are your quarterly payments? a) $1,273.52 b) $1,303.52 c) $1,283.52 d) $1,323.52 e) $1,313.52 f) None of the above. Question 12 Your brother would like to have $23,000 in 2 years for the purchase of a new car. What monthly payment should he make into an account paying 7% per year compounded monthly to attain his goal? a) $885.60 b) $875.60 c) $925.60 d) $865.60 e) $895.60 f) None of the above. Question 13 A school realizes that they need a new copy machine for their main office. The copy machine costs $4,500. After speaking with the financial advisor, they decide to pay 10% of the cost of the machine in cash and finance the rest through their credit union. How much is their monthly payment if the credit union will charge 2% per year compounded monthly for 3 years? a) $86.00 b) $23.48 c) $139.87 d) $116.00 e) $33.48 f) None of the above. Question 14 The Flores Family loves to go sailing on the weekends. Mr. Flores has decided to purchase a more spacious sailboat. The sailboat he is interested in buying in 3 years will cost him $25,000. An account at Invest Well Bank earns 2% per year compounded monthly. How much should Mr. Flores deposit in this account at the beginning of each month to be able to pay cash for the sailboat in 3 years? a) $694.40 b) $820.11 c) $742.25 d) $674.40 e) $606.55 f) None of the above