MATH106 QUIZ 1 Complete Solution

Question: #1051

1. The principal P is borrowed and the loan’s future value A at time t is given. Determine the loan’s simple interest rate r to the nearest tenth of a percent.
P=2000.00 A=2042.50 t=3 months

2. A radio commercial for a loan company states: “You only pay 33 cents a day for each $500 borrowed.” If you borrow $2,381 for 224 days, what amount will you repay, and what annual interest rate is the company actually charging? (assume a 360 day year.)
a.    Amount you repay= $¬¬¬¬_______________         (round to two decimal places)
b.    Annual interest rate=% ¬¬¬_____________ (round to four decimal places)

3. Given the annual interest rate and the compounding period, find I, the interest rate per compounding period.
5% compounded monthly
I=_____% per month (type an integer or decimal rounded to the nearest thousandth as needed)

4. 3.9% compounded quarterly
I=_____% (type an integer or decimal rounded to the nearest thousandth as needed)

5. An investment company pays 4% compounded semiannually. You want to have 18,000 in the future.
(A)    How much should you deposit now to have that amount 5 years from now?
$____ (round to the nearest cent)

(B) How much should you deposit now to have that amount 10 years from now?
$____ (round to the nearest cent)

6. What is the APY for money invested at each rate?
(A) 5% compounded monthly
(B) 6% compounded monthly

(A) APY=___% (Round to three decimal places as needed)
(B) APY=___% (Round to three decimal places as needed)

7. How long will it take $4,000 to grow to $21,000 if it is invested at 4% compounded monthly?

___ years (round to the nearest tenth of a year)

8.Use the future value formula to find the indicated value.
FV=$5765; n=9; i=0.05;PMT=?
PMT=$___ (round to the nearest cent)

9.Acme annuities recently offered an annuity that pays 5.4% compounded monthly. What equal monthly deposit should be made into this annuity in order to have $74,000 in 17 years?
The amount of each deposit should be $____ (round to the nearest cent)

10.E-loan, an online lending service, recently offered 36 month auto loans at 4.5% compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $501, how much can you borrow from E-loan? What is the total interest you will pay for this loan?
You can borrow $____ (round to two decimal places)
You will pay a total of $____ in interest. (round to two decimal places)