I need help with questions 3, 5 and 9 on the attached document

University of Maryland University College MATH 106 6384 Finite Mathematics (2162) (John Teke) January 18, 2014 Quiz 1 Directions: - Read and sign the academic honesty certification statement below, then read the questions carefully and answer them to the best of your ability. You may write your answers on this sheet or on the sheet you do your work on, but PLEASE show your work! Follow directions as outlined in Quizzes folder under the \"Assignments\" link on our LEO classroom NavBar. - Test & work is due as specified in \"Course Schedule\". I cannot accept any late submissions! This is open-bookotes; calculators, spreadsheet software, & mortgage calculators are authorized for use. Good luck! I certify the work submitted on and with this document represents my own personal work. I have not collaborated with, or consulted with, anyone else to produce the work I am submitting. I certify I have not used any instructor solutions manuals, or any online problem solving services. I understand and agree to abide by UMUC Policy on Academic Dishonesty and Plagiarism. _______________________________________ Student Signature & Date For all problems in this quiz, \"1 year\" = 12 months = 52 weeks 360 days For problems referring to commission schedules, use the following schedule: Transaction Size $0 - $1,500 $1,501 - $5,000 $5,001 - $20,000 $20,001 - $50,000 $50,001 - $500,000 Above $500,000 Commission Rate $29 + 2.5% of principal $57 + 0.6% of principal $79 + 0.3% of principal $99 + 0.2% of principal $148 + 0.1% of principal $247 + 0.08% of principal ****************************************************************************** 1. If you paid $275 to a payday loan company for the use of $4000 for 90 days, what annual rate of interest is the company charging? __________________________________ 1 University of Maryland University College MATH 106 6384 Finite Mathematics (2162) (John Teke) January 18, 2014 Quiz 1 2. What is the purchase price of a 39-week \"T-bill\" (US Treasury note) with a maturity value of $5000 that earns an annual interest rate of 4.29 % ? ___________________________________ 3. Using the commission schedule provided at the beginning of this quiz, find the annual rate of interest earned by an investment of 400 shares purchased at $21.40 a share, held for 26 weeks, and then sold at $27.60 a share. __________________________________ 4. How long (in years) will it take money to triple if it is invested at 7.0% compounded continuously? Round answer to nearest tenth of a year ___________________________________ 2 University of Maryland University College MATH 106 6384 Finite Mathematics (2162) (John Teke) January 18, 2014 Quiz 1 5. Using the commission schedule provided at the beginning of this quiz, find the annual compound rate of interest earned by an investment of 400 shares purchased at $48 a share, held for 6 years, and then sold at $156 a share. ____________________________________ 6. What is the annual percentage yield (APY) for money invested at an annual rate of 4.45% compounded daily? ___________________________________ 7. Tralfaz Life Insurance Company offers a \"child's college education\" annuity that pays 7.2% compounded quarterly. What equal quarterly deposit should be made into this annuity in order to have $200,000 for college expenses in 18 years? ___________________________________ 3 University of Maryland University College MATH 106 6384 Finite Mathematics (2162) (John Teke) January 18, 2014 Quiz 1 8. Ivan makes his first deposit of $1500 into a Roth IRA earning 6.5% interest compounded annually at age 36. He continues to make an annual deposit of $1500 until he is 60 (25 deposits in all). With no additional deposits after age 60, the money in Ivan's Roth IRA continues to earn 6.5% interest compounded annually until he retires at age 66. How much money is in Ivan's Roth IRA when he retires? ____________________________________ 9. RipUOff.com, an online lending service, offers a 48-month auto loan at 13.5% compounded monthly to applicants with \"poor\" credit ratings. a. If an applicant has a \"poor\" credit rating but can afford to make monthly payments of $400, how much can he or she borrow from RipUOff.com? b. What is the total interest the applicant will pay for this loan? Answers: a. __________________________ b. __________________________ 4 University of Maryland University College MATH 106 6384 Finite Mathematics (2162) (John Teke) January 18, 2014 Quiz 1 10. A family takes out a 30-year, $176,000 mortgage at 4.25% compounded monthly after putting $44,000 down to buy a home valued at $220,000 ($44,000 is 20% of $220,000). Find: a. the monthly payment b. the unpaid balance after 10 years c. the equity the family has built up in its house after 20 years of monthly payments, if the house's net market value 20 years from now is $300,000 Answers: a. _________________________________ b. _________________________________ c. _________________________________ 5