CHAPTER 14 QUESTIONS TAKE HOME - 10 points

Answer these questions on a separate sheet of paper, showing all your work

1.Monique deposited $12,500 into a savings account paying 6.5% annual interest compounded monthly.

What amount will she have in her account after 3 years?

2.Susan and Kim are twin sisters. Susan starts investing $100 a month at age 25 and invests for 10 years 35 at 5% compounded monthly. Susan stops investing at age 35 and does not contribute any money for the next 30 years. Kim starts investing at age 30, $150 a month at 5% for 30 years. Now at age 65:

a) How much money has Susan deposited?

b) How much money has Kim deposited?

c) Who has saved the most money? be sure to give the totals for both sisters

3 Audrey deposited $2,800 in a savings account that pays 2.65% interest compounded annually. What is the total value of the account after 7 years?

4.Keith Vaughn is trying to sell a property in Alaska. Yesterday he was offered $10,000 for the property. He was ready to accept the offer but another offer for $11,424 also came his way. The second offer is to be paid one year from now. Keith has satisfied himself that both buyers are safe, and his deal will fall through. Which deal should Keith accept?

5 Find the amount that results when $4,000 is compounded at 6%, 6% annually over 7 years.

6 .You are offered a choice between $770 today and $815 one year from today. Assume that interest rates are 4 percent. Which do you prefer?

7.Assume that you would like to put money in an account today to make sure your child has enough money in 10 years to buy a car. If you would like to give your child $10,000 in 10 years, and you know you can get 5% interest per year from a savings account during that time, how much should you put in the account now?