Chapter Review
Chapter
Chapter 7
Section
Chapter Review
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Solutions 16 Videos

Louise borrows $720, which she plans to repay in a year and a half. She is charged 9.5% simple interest. a) How much interest must Louise pay? b) What is the total amount that she must pay back? Buy to View Q1 Yuri deposits$850 into an account that earns 6.25% per year simple interest. How long will it take for the amount in this account to reach $1000? Buy to View Q2 Nicola borrowed$750 for 4 years. The amount she repaid was $945. a) Use the given information to draw a graph of the amount in the account as a function of time. b) Explain why the relationship is linear. c) Determine the vertical intercept of the graph and explain what it means. d) Determine the slope of the graph and explain what it means. Buy to View Q3 Steve deposits$835 into an account that earns 8.25% per year, compounded annually.

a) Determine the amount in the account after 5 years.

b) How much interest will have been earned?

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Q4

An account with an initial value of $1000 earns 3% interest per year, compounded semiâ€”annually. a) Describe the shape of the graph of amount versus time. b) What is the vertical intercept of the graph? What does it represent? c) Describe what happens to the slope of the graph. Buy to View Q5 Elise deposits$500 into an account that earns 6.5% annual interest, compounded quarterly.

a) How long will it take, to the nearest month, for this amount to double?

b) Does the doubling time change if the principal changes? Explain.

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Q6

What amount should be invested today so that there will be $1000 in an account in 3 years, if interest is earned at a rate of 7% per annum, compounded annually? Buy to View Q7 Dwayne needs$45 000 in 6 years to buy a new car. His investment earns interest at a rate of 4.8% per year, compounded monthly.

a) Determine the present value needed in the account so that Dwayne can afford the car.

b) How much interest will be earned?

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Q8

The present value of an account worth $3823 in 4 years is$3000. If interest is compounded semi-annually, determine the annual rate of interest.

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Q9

The future value of a $200 deposit in an account that earns 6.25% annual interest is$272.71 after 5 years. Determine the compounding period for this investment.

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Q10

At the end of every year for 4 years, Jacqueline deposits $2400 into an account that earns 4.3% per annum, compounded annually. a) Draw a time line to illustrate this annuity. b) Explain why this annuity can be represented as a geometric series. c) Determine the amount of the annuity. d) How much interest will be earned? Buy to View Q11 Marko deposits$400 into an account at the end of every month for 8 years. Interest is earned at a rate of 5.5%, compounded monthly.

a) Determine the amount of the annuity.

b) How much interest will be earned?

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Q12

Latisha decides to make regular deposits every 2 weeks into an account that earns 7.8% annual interest, compounded bi-weekly. She hopes to have $30 000 at the end of 3 years. Determine the amount of the regular payment that she will need to make. Buy to View Q13 a) What is the duration of this annuity? How can you tell? b) Determine the annual rate of interest and the number of compounding periods per year. c) Determine the present value of this annuity. d) Determine the total interest earned. Buy to View Q14 Suki would like to withdraw$800 per month for the next 20 years. The interest in her account is 6.25% per year, compounded monthly. How much must Suki deposit today to finance this annuity?

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Q15

Mario has saved \$250 000 for his retirement, which he has deposited into an account that earns 7.2% per year, compounded monthly. He plans to make regular monthly withdrawals for the next 25 years. What is the maximum monthly amount that Mario can withdraw?

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Q16