Chapter Test Financial Applications
Chapter
Chapter 8
Section
Chapter Test Financial Applications
Solutions 9 Videos

For the investment, determine the total amount and the interest earned.

• Principle: $850 • Rate of interest per Year: 9% simple interest • Time: 6 years Buy to View Q1a For the investment, determine the total amount and the interest earned. • Principle:$5460
• Rate of interest per Year: 8.4% compounded semi-annually
• Time: 13 years
Q1b

For the investment, determine the total amount and the interest earned.

• Principle: $230 per month • Rate of interest per Year: 4.8% compounded monthly • Time: 6 \frac{1}{2} years Buy to View Q1c The amounts owed for two different loans are shown below. a) For each loan, determine whether simple interest or compound interest is being charged. Justify your answer. b) What annual interest rate is each loan being charged? Round your answer to two decimal places. c) How much was each loan originally? d) Determine the future value of each loan after 10 years. Buy to View Q2 Betsy inherits$15000 and would like to put some of it away for a down payment on a house in 8 years. If she would like to have $25 000 for the down payment, how much of her inheritance must she invest at 9.2%/a compounded quarterly? Buy to View Q3 Derek invests$250 per month for 61 years at 4.8%/a compounded monthly. How much will his investment be worth at the end of the 6 \frac{1}{2} years?

Q4

Simone wants to save money for her retirement. Her two best options are 5.88%/a compounded monthly or 6%/a compounded annually. Which option should she choose? Why?

Q5

Anand’s parents have been paying $450 per month into a retirement fund for the last 30 years. The fund is now worth$450 000. What annual interest rate, compounded monthly, are Anand’s parents earning? Round your answer to two decimal places.