Topics: Compound interest, Annual percentage rate, Interest Pages: 3 (588 words) Published: March 21, 2013
Name________________________________ UDC – Quantitative Reasoning I EXAMINATION 3 – Personal Finance – Exponential Functions Fall - 2012 Instructions: This exam is worth 100 points. Read each question carefully. Answer each question clearly and concisely. Please, show All of Your Work. Remember, I do not believe in magic!!!

1. What is the simple interest for a principal of \$620 invested at a rate of 7% for 3 years? \$173.60 \$130.20 \$172.60 \$129.20

A) B) C) Answer D) E)

2. If you borrow \$1100 for 5 years at 14% annual simple interest, how much must you repay at the end of the 5 years? \$770.00 \$2215.13 \$2117.96 \$77,000 \$1870.00

3. How much interest is earned in 5 years on \$2,900 deposited in an account paying 7.1% interest, compounded quarterly? \$1,223.07 \$1,186.44 \$266.68 \$1,029.50

4. Suppose Emily Yu deposited \$1300 in an account that earned simple interest at an annual rate of 8% and left it there for 4 years. At the end of the 4 years, Emily deposited the entire amount from that account into a new account that earned 8% compounded quarterly. She left the money in this account for 4 years. How much did she have after the 8 years? \$2355.70 \$2427.96 \$3233.87 \$2457.65 \$4850.81

5. If \$1,390 is invested in an account which earns 9% interest compounded annually, which will be the balance of the account at the end of 14 years? \$11,106,193 \$3141 \$4645 \$21,211

6. Susan bought a 6-month \$1100 certificate of deposit. At the end of 6 months, she received \$99 simple interest. Find the annual rate of simple interest paid. 18% 16% 15.0% 9%

7. What lump sum should be deposited in an account that will earn at an annual rate of 8%, compounded quarterly, to grow to \$140,000 for retirement in 15 years? \$137,052.73 \$42,335.45 \$24,137.93

D) E)

\$63,636.36 \$42,669.52

A) B) C) D) Answer E)

8. How much money should be...