Compound Interest and Percent
Chapter 5, 6 Review
1. You invested $1,650 in an account that pays 5 percent simple interest. How much more could you have earned over a 20-year period if the interest had compounded annually?
A. $849.22
B. $930.11
C. $982.19
D. $1,021.15
E. $1,077.94
2. Today, you earn a salary of $36,000. What will be your annual salary twelve years from now if you earn annual raises of 3.6 percent?
A. $55,032.54
B. $57,414.06
C. $58,235.24
D. $59,122.08
E. $59,360.45
3. You hope to buy your dream car four years from now. Today, that car costs $82,500. You expect the price to increase by an average of 4.8 percent per year over the next four years. How much will your dream car cost by the time you are ready to buy it?
A. $98,340.00
B. $98,666.67
C. $99,517.41
D. $99,818.02
E. $100,023.16
4. Your father invested a lump sum 26 years ago at 4.25 percent interest. Today, he gave you the proceeds of that investment which totaled $51,480.79. How much did your father originally invest?
A. $15,929.47
B. $16,500.00
C. $17,444.86
D. $17,500.00
E. $17,999.45
5. What is the present value of $150,000 to be received 8 years from today if the discount rate is 11 percent?
A. $65,088.97
B. $71,147.07
C. $74,141.41
D. $79,806.18
E. $83,291.06 6. You would like to give your daughter $75,000 towards her college education 17 years from now. How much money must you set aside today for this purpose if you can earn 8 percent on your investments?
A. $18,388.19
B. $20,270.17
C. $28,417.67
D. $29,311.13
E. $32,488.37
7. One year ago, you invested $1,800. Today it is worth $1,924.62. What rate of interest did you earn?
A. 6.59 percent
B. 6.67 percent
C. 6.88 percent
D. 6.92 percent
E. 7.01 percent
8. According to the Rule of 72, you can do which one of the following?
A. double your money in five years at 7.2 percent interest
B. double your money in 7.2 years at 8 percent interest
C. double your money in 8 years at 9 percent interest
D. triple your
1. You invested $1,650 in an account that pays 5 percent simple interest. How much more could you have earned over a 20-year period if the interest had compounded annually?
A. $849.22
B. $930.11
C. $982.19
D. $1,021.15
E. $1,077.94
2. Today, you earn a salary of $36,000. What will be your annual salary twelve years from now if you earn annual raises of 3.6 percent?
A. $55,032.54
B. $57,414.06
C. $58,235.24
D. $59,122.08
E. $59,360.45
3. You hope to buy your dream car four years from now. Today, that car costs $82,500. You expect the price to increase by an average of 4.8 percent per year over the next four years. How much will your dream car cost by the time you are ready to buy it?
A. $98,340.00
B. $98,666.67
C. $99,517.41
D. $99,818.02
E. $100,023.16
4. Your father invested a lump sum 26 years ago at 4.25 percent interest. Today, he gave you the proceeds of that investment which totaled $51,480.79. How much did your father originally invest?
A. $15,929.47
B. $16,500.00
C. $17,444.86
D. $17,500.00
E. $17,999.45
5. What is the present value of $150,000 to be received 8 years from today if the discount rate is 11 percent?
A. $65,088.97
B. $71,147.07
C. $74,141.41
D. $79,806.18
E. $83,291.06 6. You would like to give your daughter $75,000 towards her college education 17 years from now. How much money must you set aside today for this purpose if you can earn 8 percent on your investments?
A. $18,388.19
B. $20,270.17
C. $28,417.67
D. $29,311.13
E. $32,488.37
7. One year ago, you invested $1,800. Today it is worth $1,924.62. What rate of interest did you earn?
A. 6.59 percent
B. 6.67 percent
C. 6.88 percent
D. 6.92 percent
E. 7.01 percent
8. According to the Rule of 72, you can do which one of the following?
A. double your money in five years at 7.2 percent interest
B. double your money in 7.2 years at 8 percent interest
C. double your money in 8 years at 9 percent interest
D. triple your