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Math 1309
Review for Test #3
Sections 4.1 – 4.3, 9.7, and 12.2
1.
Compound Interest and Continuous Interest:
You must know the formulas!
Page 204 (31 – 50)
Blakely Investment Company owns an office building in the commercial district of a city.
As a result of
the continued success of an urban renewal program, local business is enjoying a mushroom.
The current
market value of the property is $300,000.
If the expected rate of inflation for the present market price is
10% for the next 15 years, find how long it will take for the property to be worth $600,000.
2.
Annuities:
Page 219 (15 – 30)
Jackson deposits $100 at the end of each month in a savings account earning interest at the rate of
8% per year, compounded monthly.
How much will he have in this account at the end of 6 years,
assuming that he makes no withdrawals during that period?
3.
Amortization and Sinking Funds:
Page 230 (16 – 34)
The price of a new car is $16,000.
Assume an individual makes a down payment of 25% toward the

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