141-unknown-06faex01-v2

141-unknown-06faex01-v2 - Name Math 141 First Midterm Exam...

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Unformatted text preview: Name ____ .__....._._..._____._._._.._______._ Math 141 First Midterm Exam Redux Due Tuessday October 24 2006 I I I I 20 Points W W THE SAME RULES AS TO DISCLOSURE APPLY AS FOR THE PROBLEMS. NUMERICAL AN— SWERS ARE REQUIRED. YOU MUST EXPLAIN HOW YOU GOT YOUR ANSWER AND WHY YOU BELIEVE IT TO BE CORRECT. HAND IN THE ORIGINAL EXAM TOGETHER WITH THIS ONE. I. (20 points.) You deposit \$100 at 3% per year. What is the balance at the end of one year if the interest is compounded monthly? l II. (20 points.) You want to save up \$3000 for a vacation two years from now. Starting today you will make 24 equal monthly deposits into a savings account that pays 7%‘interest per year compounded monthly. What is the size of these deposits? (Assume that it is the beginning of the month and that your ﬁrst payment is at the end of the month.) III. (20 points.) This problem is the same as problem‘II except that the savings account pays 7% interest per year compounded daily. (Assume that one year = 360 days and that one month = 30 days.) Hint: The answer to this problem should be almost the same as the answer to the previous problem. The only dtﬁ’erence is that the eﬂecttve interest rate is slightly diﬁ’erent. IV. (20 points.) To solve a certain problem in ﬁnancial mathematics you must evaluate the followsum: 0.1 1° 01 11 01 98 8:400 1+-— 400 4 4 < 52) + (n52) + +400<1+52> . State the geometric series formula and show how use it to evaluate S on a calculator. Hint: To apply the geometric series formula you must factor something out. at?” 2 mp - mg. V. (20 points.) You put \$10,000 into an account which earns 10% per year compounded annually but every year you must pay a 30% tax on the gain. How much is in the account at the end of the 20th year? (The 30% tax is on the difference between what is in the account at the beginning of the year and what is in the account at the end of the year.) The original problem asked how much is in the account at the end of the 5th year; I changed this to the 20th year. ...
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141-unknown-06faex01-v2 - Name Math 141 First Midterm Exam...

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