Math1313-Test3-Review-Additional-S10

Math1313-Test3-Review-Additional-S10 - Math 1313 Test 3...

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Math 1313 Test 3 Supplemental Review For questions 1 – 12, state the type of problem and calculate the answer. 1. Parents of a college student wish to set up an account that will pay $350 per month to the student for four years. How much should they deposit now at 9% annual interest, compounded monthly? 2. A tractor costs $16,000. You pay 25% down and finance the rest with equal monthly payments of 6 years. If you must pay 18% annual interest compounded monthly, what is your monthly payment? How much interest will you pay over the 6 years? 3. What is the effective rate of interest for money invested at 10% annual interest compounded monthly? 4. A newborn child received a gift of $5000 towards a college education from her grandparents. How much will the gift be worth in 17years if it is invested at 9% annual interest compounded quarterly? 5. Your friend’s payments on his new car are $524.37 per month. He received a $3000 trade-in on his old car, and received a financing package that was 8.9% annual interest, compounded monthly for five years. What was the total purchase price of the car? 6. A company estimates that it will have to replace a piece of equipment at a cost of $10,000 in 5 years. The owner wants to have this money available when the equipment is replaced. He can make fixed quarterly payments and earn interest at 6% annual interest compounded quarterly. How much should the payments be? 7. Cassie’s graduation is coming up. She has decided to take a trip to Cancun after graduation. She anticipates she’ll need $2,000 for the hotel, air, and spending money. How much should she deposit in an account that pays 10.56% per year compounded monthly to have the funds available when she graduates in 2 years? 8. Jenna wants to begin saving money for a new car. She can make monthly payments of $150 into an account at her credit union which pays 5% annual interest compounded monthly. How much money will she have available for her new car in three years? 9. Jack and Jill bought a house costing $150,000. They made a 20% down payment on the house and financed the rest with a conventional mortgage for 30 years at 6.25% annual interest, compounded monthly. How much are their monthly payments? 10. Betty and Bob would like to buy a house, but don’t have a down payment. They anticipate that they will need $20,000 cash to buy a house. Their bank is paying 4.8% annual interest compounded quarterly. What should their quarterly payments be if they wish to have the down payment in five years? Math 1313 – Test 3 Supplemental Review 1
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11. A health club offers to let you join for $50 down and payments of only $36 per month for 3 years. When you read the fine print, you discover that the interest rate is 18% per year compounded monthly. What is the cash price of the health club membership? How much will the club membership cost you after 3 years?
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Math1313-Test3-Review-Additional-S10 - Math 1313 Test 3...

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