You invest $1,000 with an interest rate of 4% annually (annually means once each year). How much interest will you earn after one year?

Question 1 options:

	$4
	$40
	$400
	$4,000

Question 2 (1 point)

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Joanna opens a bank account that earns 2.1% interest annually. She deposits $3000. Howmuch interest will she earn after a year?

Question 2 options:

	$3.15
	$6.30
	$31.50
	$63.00

Question 3 (1 point)

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Jasmin invests her money in a special type of bank account, a certificate of deposit. She can't access her money for one year but it will earn 8% interest. If she deposits $1234, how much interest will she earnin one year?

Question 3 options:

	$98.72
	$148.08
	$197.44
	$296.16

Question 4 (1 point)

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In order to buy a pair of new limited edition sneakers, Juan borrows $200 from Pete the loan shark. Pete demands to be paid back in one week and, in addition to the $200, Pete wants 22% interest on the one-week loan. How much interest will Juan have to pay on his$200 loan in one week?

Question 4 options:

	$4.40
	$44.00
	$88.00
	$440.00

Question 5 (1 point)

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In order to pay for textbooks for his first semester at college, Samuel borrowed $100 from his friend Cindy. She lent him the money on the condition that he pay her back the original$100 plus an additional 5% interest on what he borrowed. How much will Samuel pay Cindy back in total?

Question 5 options:

	$1.05
	$5.00
	$100.00
	$105.00

Question 6 (1 point)

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In "The Richest Man in Babylon", Arkad's approach to wealth accumulation primarily involves:

Question 6 options:

	Focusing on earning more without managing expenses
	Engaging in frequent trading to capitalize on market fluctuations
	Borrowing money to start new businesses
	Living below his means and investing his savings

Alex's grandmother has $10,000 in a bank account that is not earning interest. She has promised to give Alex this money for college once he graduates high school in six years.Alex understands the time value of money, and wants to persuade his grandmother to put the money in an S&P index fund. Although no one knows what the rate of return will be, the S&P has historically earned an average of 10% per year. Calculate the future value of the $10,000 (in six years) if the money was invested at a 10% annual return. Assume compounding is only once a year.

Question 1 options:

	$16,105
	$17,716
	$17,748
	$18,192

Question 2 (1 point)

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Sofia has a government bond that will be worth $500 when it matures in 5 years. She wants to sell it to her brother because she needs the cash now for car repairs. Assuming monthly compounding at 0.25% per month, what is the present value of the bond?

Question 2 options:

	$429.67
	$430.19
	$430.43
	$430.88

Question 3 (1 point)

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Darius worked in a union motorcycle factory for 20 years before returning to school to become a paramedic. He is 45 now. He has a pension from his previous employer, which will pay him $1500/month after his retirement at 65. Assuming he will live to 80, he would earn $270,000 over 15 years. The company has stopped offering pensions and wants to buy out his pension today. If Darius accepted a buyout of $125,000 and invested it, how much would it be worth when he turns 65? Assume he can invest the money at a monthly interest rate of 0.25% with monthly compounding.

Question 3 options:

	$205,461
	$211,984
	$219,001
	$227,594

Question 4 (1 point)

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Darius worked in a union motorcycle factory for 20 years before returning to school to become a paramedic. He is 45 now. He has a pension from his previous employer, which will pay him $1500/month after his retirement at 65. Assuming he will live to 80, he would earn$270,000 over 15 years. The company has stopped offering pensions and wants to buy out his pension today. Assuming the value of Darius' pension will be $217,208 when he turns 65, should Darius accept a buyout of $125,000?

(Hint: The previous question asked you to calculate the value of the buyout when Darius turns 65.)

Question 4 options:

	No
	Yes

Question 5 (1 point)

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Sam and Nadia just inherited $150,000 from Nadia's grandmother. This is exactly the amount of principal remaining on their mortgage. They are wondering: Should they pay off the mortgage or keep making their monthly payments and invest the money in an S&P Index fund? They have a 30-year mortgage at 4% interest, and they have 16 years remaining to pay. They pay $1000/month in principal and interest payments. Assume they could earn about 9% annual interest on an investment.

How much will Sam and Nadia spend on their mortgage if they continue to make normal payments until it is paid off in 16 years?

Question 5 options:

	$76,000
	$192,000
	$336,000
	$596,000

Question 6 (1 point)

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Sam and Nadia just inherited $150,000 from Nadia's grandmother. This is exactly the amount of principal remaining on their mortgage. They are wondering: Should they pay off the mortgage or keep making their monthly payments and invest the money in an S&P Index fund? They have a 30-year mortgage at 4% interest, and they have 16 years remaining to pay. They pay $1000/month in principal and interest payments. Assume they could earn about 9% annual interest on an investment.

How much will Sam and Nadia have invested if they put the $150,000 into the S&P Index fund for 16 years (round to the nearest thousand dollars)?

Question 6 options:

	$76,000
	$192,000
	$336,000
	$596,000