PRINTABLE VERSION Quiz 4 Question 1 Luke invested $130 at 4% simple interest for a period of 7 years. How much will his investment be worth after 7 years? a) $169.40 b) $166.40 c) $168.40 d) $167.40 e) $164.40 f) None of the above. Question 2 Mr. Smith wishes to retire in 12 years. When he retires he would like to have $100,000 in his bank account. Mr. Smith's bank pays 9% per year compounded annually. How much should he deposit now to attain his goal? a) $35,557.47 b) $35,553.47 c) $35,550.47 d) $35,551.47 e) $35,555.47 f) None of the above. Question 3 A grandmother deposited $4,000 in an account that pays 8% per year compounded annually when her granddaughter was born. What will the value of the account be when the granddaughter reaches her 13th birthday? a) $10,858.49 b) $10,848.49 c) $10,878.49 d) $10,888.49 e) $10,868.49 f) None of the above. Question 4 In order to purchase a new freezer in 3 years, the Steakhouse Restaurant has decided to deposit $1,500 in an account that earns 3% per year compounded monthly for 3 years. How much money will be in the account in 3 years? a) $1,601.08 b) $1,641.08 c) $1,651.08 d) $1,621.08 e) $1,671.08 f) None of the above. Question 5 Stor-Away Co. needs to buy a new forklift. The company decides to deposit $2,300 in an account that earns 6% per year compounded semiannually. How much will the investment be worth in 4 years? a) $2,903.57 b) $2,893.57 c) $2,953.57 d) $2,913.57 e) $2,923.57 f) None of the above. Question 6 John wishes to set up an account for his grandfather so that he can have some extra money each month. John wants his grandfather to be able to withdraw $190 per month for the next 3 years. How much must John invest today at 3% per year compounded monthly so that his grandfather can withdraw $190 per month for the next 3 years? a) $6,563.43 b) $6,533.43 c) $6,513.43 d) $6,553.43 e) $6,543.43 f) None of the above. Question 7 John got a part time weekend job at a local restaurant to save for a new car. He plans on depositing $120 per month for the next 4 years in a savings account with a rate of 4% per year compounded monthly. How much will he have saved toward his down payment at the end of the 4 year period? a) $6,195.15 b) $6,205.15 c) $6,235.15 d) $6,215.15 e) $6,255.15 f) None of the above. Question 8 Fred purchased a new car. His monthly payments are $450 per month. He will be paying on his car for 5 years, and the loan costs 6% per year compounded monthly. What was the original cost of the car? a) $23,277.50 b) $23,272.50 c) $23,276.50 d) $23,273.50 e) $23,274.50 f) None of the above. Question 9 Jackson deposits $170 each month into a savings account earning interest at the rate of 5% per year compounded monthly. How much will he have in this account at the end of 4 years? a) $9,015.53 b) $9,008.53 c) $9,014.53 d) $9,012.53 e) $9,009.53 f) None of the above. Question 10 Esther pays $355 per month for 5 years for a car. She made a down payment of $4,500. If the loan costs 7.1% per year compounded monthly, what was the cash price of the car? a) $17,885.56 b) $22,385.56 c) $20,981.37 d) $29,981.37 e) $13,385.56 f) None of the above. Question 11 You borrowed $11,000 from your bank to build a small cabin on your property. The bank will charge 6% per year compounded quarterly. You decide to payoff this loan in 2 years by making quarterly payments. How much are your quarterly payments? a) $1,449.42 b) $1,469.42 c) $1,499.42 d) $1,479.42 e) $1,439.42 f) None of the above. Question 12 Your brother would like to have $28,000 in 3 years for the purchase of a new car. What monthly payment should he make into an account paying 5% per year compounded monthly to attain his goal? a) $732.52 b) $722.52 c) $702.52 d) $692.52 e) $682.52 f) None of the above. Question 13 A school realizes that they need a new copy machine for their main office. The copy machine costs $5,500. After speaking with the financial advisor, they decide to pay 10% of the cost of the machine in cash and finance the rest through their credit union. How much is their monthly payment if the credit union will charge 4% per year compounded monthly for 2 years? a) $234.95 b) $202.12 c) $18.58 d) $38.58 e) $214.95 f) None of the above. Question 14 The Flores Family loves to go sailing on the weekends. Mr. Flores has decided to purchase a more spacious sailboat. The sailboat he is interested in buying in 3 years will cost him $25,000. An account at Invest Well Bank earns 6% per year compounded monthly. How much should Mr. Flores deposit in this account at the beginning of each month to be able to pay cash for the sailboat in 3 years? a) $713.28 b) $655.55 c) $731.02 d) $635.55 e) $567.85 f) None of the above