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Finite
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Math
Week 4 Quiz –Financial Topics
For each section read the directions and determine the best answer
Choose the best answer for the questions below. Answers are rounded to nearest whole dollar amount.
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1. What is the simple interest earned over 6
years on a principal of $55,000 at 12% interest?
a. $39,600 b. $94,600 c. $61,600 d. $58,960
3. What is the value after 4 years if $8,700 is invested in an account that pays 9% interest compounded monthly?
a. $3,300 b.$12,453 c. $9,519
d. $279,979
5. Which of the following choices of investment
yields the greatest for a deposit of $20,000 over
20 years?
a. 12% simple interest
b. 10.5% compounded quarterly
c. 11.5% compounded weekly
d. 11% compounded daily
2. What is the effective rate of interest for a one year loan of $3,000 given at 15% interest if the interest is compounded quarterly?
a. 15.24% b. 15.27% c. 15.87% d. 15.94%
4. How much is the discount on a loan for which you agree to pay the lender $6,000 in one year at 8% interest?
a. $480
b. $5,520 c. $6,480 d. $960
6. You are due to receive 3 payments (one per year) which you can invest in an account that earns 9% interest per year. Which sequence of payments yields the greatest amount?
a. $200, $300, $250 b. $250, $100, $300 c. $400, $100, $100 d. $300, $200, $250
7. Compute the monthly loan payment required to pay off $150,000 dollars at 7% interest over 15 years. (Note: a monthly payment means the interest is compounded monthly)
a. $1,348.24
b. $427,342.01
c. $2,374.12
d. $16,084.35
Finite Math
Week 4 Quiz –Financial Topics
8. How much money should be invested in an account that earns 9% interest, compounded monthly, if you want to have $500,000 after 20 years?
a. $45,600.00 b. $83,206.42 c. $41,603.21 d. $430,594.93
9. What is the value of an annuity if $250 dollars is deposited monthly for 7 years at 12% interest?
a. $1,803.38 b. $32,668.07 c. $113,527.42 d. $52,098.73
10. How much would you need to deposit if you wanted to withdrawal $750 a month for 3 years if a bank will pay 8% interest?
a. $25,000.00 b. $18,781.22 c. $23,933.85 d. $31,060.74
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