Simple & Compound Interest

Dave took out a $5500 loan at 10% and eventually repaid $8250 (principal and interest). What was the time period of the loan? The time period of the loan was ID: Bus Econ 5.1.41 year(s). (Type an integer or a decimal.) Tuition of $1313 will be due when the spring term begins in 2 months. What amount should a student deposit today, at 6.1%, to have enough to pay the tuition? The student should deposit S Simplify your answer. Round to the nearest dollar as needed.) ID: Bus Econ 5.1.43 A stock that sold for $19 per share at the beginning of the year was selling for $33 at the end of the year. If the stock paid a dividend of $2.65 per share, what is the simple interest rate on the investment in this stock? Consider the interest to be the increase in value plus the dividend. . The simple interest rate is (Do not round until the final answer. Then round to the nearest tenth as needed.) ID: Bus Econ 5.1.49 A newborn child receives a $4,000 gift toward a college education from her grandparents. How much will the $4,000 be worth in 19 years if it is invested at 5.7% compounded quarterly? . It will be worth $ Round to the nearest cent) ID: 5.2.11 Find the compound amount and the amount of interest eamed by the following deposit. $5,000 at 3.49% compounded continuously for 6 years. What is the compound amount? Round to the nearest cent.) What is the interest earned? (Round to the nearest cent.) A person wants to invest $20,000 for market fund, pays a guaranteed 5.2% interest compounded daily. The second investment, a treasury note, pays 5.4% annual interest, which investment pays the most interest over the 3-year period? 6. 3 years and is considering two different investments. The first investment, a money Choose the correct answer below OA. Both the market fund and the treasury note produce the same interest with S OB. The market fund is the better investment, since the market fund produces OC. The treasury note is the better investment, since the market fund produces (Round to the nearest cent as needed.) in interest, and the treasury note pays $ in interest in interest, and the treasury note pays $ in interest. 7. Find the amount of each payment to be made into a sinking fund eamang 7% compounded monthly to accumulate $69,000 over 4 years. Payments are made at the end of each period. The payment size is $ Round to the nearest cent.) ID: 5.3.17 8, A woman deposits $14,000 at the end of each year for 12 years in an account paying 8% interest compounded annually. (a) Find the final amount she will have on deposit. (b) Her brother-in-law works in a bank that pays 7% compounded annually. If she deposits money in this bank instead of the other one, how much will she have in her account (c) How much would she lose over 12 years by using her brother-in-aw's bank? (a) She will have a total of $ (Simplify your answer. Round to the nearest cent as needed) on deposit (b) She will have a total of $ (Simplify your answer. Round to the nearest cent as needed.) on deposit in her brother-in-law's bank. (c) She would lose $ (Simplify your answer. Round to the nearest cent as needed.) over 12 years by using her brother-in-laws bank. ID: Bus Econ 5.3.39 9. Gilberto opened a savings account for his daughter and deposited $700 on the day she was bom. Each year on her birthday, he deposited another $700. If the account pays 10% interest, compounded annually, how much is in the account at the end of the day on her 8th birthday? At the end of the day on her 8th birthday, the amount in the account is $ (Simplify your answer. Type an integer or a decimal. Round to the nearest cent if needed.) 10. A woman is selling some land, and she will be paid a lump sum of $80,000 in 14 years. Until then, the buyer pays 9% simple interest quarterly. (a) Find the amount of each quarterly interest payment. (b) The buyer sets up a sinking fund so that enough money will be present to pay off the $80,000. The buyer wants to make semiannual payments into the sinking fund; the account pays 5% compounded semiannually. Find the amount of each payment into the fund (a) The amount of each quarterly interest payment is $ Round to the nearest dollar as needed.) (b) The buyer needs to make semiannual payments of $ (Round to the nearest cent as needed.) ID: Bus Econ 5.3.51 11. When Joe and Sarah graduate from college, each expects to work a total of 45 years. Joe begins saving for retirement immediately. He plans to deposit $550 at the end of each quarter into an account paying 7.3% interest, compounded quarterly, for 12 years. He will then leave his balance in the account, earning the same interest rate, but make no further deposits for 33 years. Sarah plans to save nothing during the first 12 years and then begin depositing $550 at the end of each quarter in an account paying 7.3% interest, compounded quarterly for 33 years. Complete parts (a) through (e) a. Without doing any calculations, predict which one will have the most in his or her retirement account after 45 years Then test your prediction by answering the following questions. Choose the correct answer below O A. Sarah will have more in her account after 45 years. Sarah contributed more overall, so she O B. Both Joe and Sarah will have the same amount of money in their accounts because they O C. Sarah will have more in her account after 45 years. Joe eaned interest for 12 more years O D. Joe will have more in his account after 45 years. Sarah contributed more money overall, but will have more money in her account. were both earning 7.3% interest on their money for 33 years. than Sarah, but Sarah contributed monthly payments for a lot longer than Joe. Joe was earning 7.3% interest per quarter for 33 years. b. How much will Joe contribute to his retirement account? (Round to the nearest dollar.) c. How much will be in Joe's account after 45 years? Round to the nearest dollar.) d. How much will Sarah contribute to her retirement account? Round to the nearest dollar.) e. How much will be in Sarah's account after 45 years? Round to the nearest dollar.)