Question 1: (1 point)

4B Homework Help Table
Textbook Examples		Textbook Homework Sections		Tutorial Videos		InterAct Math Practice
Ex 1 (p. 199)		(51-54) - Simple Interest				Exercise 51

Calculate the amount of money you will have in the following account after 5 years, assuming that you earn simple interest. You deposit $625 into an account with an annual interest rate of 2.75%. $__________ (Round to the nearest cent.)

Question 2: (3 points)

4B Homework Help Table
	Textbook Examples		Textbook Homework Sections		Tutorial Videos		InterAct Math Practice
	Ex 2-3 (p. 201-204)		(55-56) Simple vs. Compound Interest		(click here)		Exercise 55
Bank account A begins with a deposit of 2,500 dollars and earns 6% simple interest annually. Bank account B also begins with 2,500 dollars and earns 6% interest compounded annually. Bank account C begins with 2,500 dollars and earns 6% APR compounded monthly.

1.

Complete the table showing the amount in each account at the end of one year. (Round all answers to the nearest dollar.)

Years	Account A	Account B	Account C
1	__________	__________	__________

2.

Complete the table showing the amount in each account at the end of five years. (Round all answers to the nearest dollar.)

Years	Account A	Account B	Account C
5	__________	__________	__________

3.

Complete the table showing the amount in each account at the end of ten years. (Round all answers to the nearest dollar.)

Years	Account A	Account B	Account C
10	__________	__________	__________

4.

Which of the three investments is best for the investor?

(a)	Account A
(b)	Account B
(c)	Account C

Question 3: (2 points)

4B Homework Help Table
	Textbook Examples		Textbook Homework Sections		Tutorial Videos		InterAct Math Practice
	Ex 5&7 (p. 206/210)		(57-62) Compound Interest		(click here)		Exercise 57

$1,200 is invested at 3.5% APR compounded daily. Use the compound interest formula to compute the balance in the account after 10 years. Balance =$__________

(Round to the nearest cent.)

$1,200 is invested at 3.5% APR compounded continuously. Use the compound interest formula to compute the balance in the account after 10 years. Balance = $__________

(Round to the nearest cent.)

Question 4: (3 points)

4B Homework Help Table

Textbook Examples

Textbook Homework Sections

Tutorial Videos

InterAct Math Practice

Ex 6 (p. 208)

(71-74) APY

(click here)

Exercise 71

1.

Given an APR of 3.5%, calculate the APY for each of the following. (Round all answers to the nearest thousandth of a percent.)

Compounds	APY
Annually	____________%
Quarterly	____________%
Monthly	____________%
Daily	____________%

2.

Which frequency of compounding--annually, quarterly, monthly, or daily--leads to the greatest APY?

(a)	daily
(b)	quarterly
(c)	monthly
(d)	annually

3.

When are APY and APR the same?

(a)	none of the above
(b)	when compounding is annually
(c)	when compounding is monthly
(d)	when compounding is quarterly

Question 5: (1 point)

4B Homework Help Table
	Textbook Examples		Textbook Homework Sections		Tutorial Videos		InterAct Math Practice
	Ex 8-9 (p. 211)		(81-84) Solving for the Principal		(click here)		Exercise 81

Suppose you are going to need $15,000 in 9 years. If you can get an average of 7.9% APR compounded annually over that time, how much would you need to deposit now in order to meet your goal? $__________

(Round to the nearest dollar and do not use commas.)

Question 6: (3 points)

4B Homework Help Table
	Textbook Examples		Textbook Homework Sections		Tutorial Videos		InterAct Math Practice
	Ex 6 (p. 208)		(89-90) Small Rate Differences		(click here)		Exercise 89

Fred invests $2,500 at 2.3% APR compounded annually, and George invests $2,500 at 2.35% APR compounded annually.

How much money does Fred have after 10 years? (Round to the nearest dollar.) $__________ How much money does George have after 10 years? (Round to the nearest dollar.) $__________ How much more does George have than Fred? (Round to the nearest dollar.) $__________

Question 7: (3 points)

4B Homework Help Table
	Textbook Examples		Textbook Homework Sections		Tutorial Videos		InterAct Math Practice
			(97) Retirement fund		(click here)		Exercise 97

Kelly wants to accumulate 1 million dollars by investing a lump sum into an IRA (Individual Retirement Account) and letting it grow for the next 45 years.

After researching different IRA's she has narrowed her investment decision to two possibilities.

Option 1 pays an APR of 3.35% compounded continuously, and Option 2 pays an APR of 3.3% compounded annually.

How much needs to be invested in Option 1 to accumulate the desired amount? (Round to the nearest dollar and don't include commas.) $__________. How much needs to be invested in Option 2 to accumulate the desired amount?

(Round to the nearest dollar and don't include commas.) $__________. Which option is the best (highest return)?

(a)	Option 1
(b)	Option 2

Question 8: (1 point)

4B Homework Help Table
	Textbook Examples		Textbook Homework Sections		Tutorial Videos		InterAct Math Practice
			(99-101) (Finding Time Periods)		(click here)		Exercise 101

Suppose you deposit $13,000 in a bank account bearing 7.6% interest compounded monthly. How many months would it take (to the nearest month) for your account balance to top $15,000? Use the trial and error method with a calculator to find your answer.

__________