MATH 320 Practice Test 6

MATH 320 Practice Test 6 - II-22PRACTICEMULTIPLECHOICETEST

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Unformatted text preview: II-22PRACTICEMULTIPLECHOICETEST 61.FundAaccumulatesataforceofinterest1+0.~5tattimet,fort2: 0,andFundBaccumulatesat a constantforce of interest.05.You are given:(E)1094(E)14.99(E)18,113(E)2+el(D)14.61(D)1073~17,936J2+e'!44+20e1(C)13.55(C)17,499(C)1048(C)1+e'!(B)17,196(B)13.50:1027(B)fdoCalculate82.---=----'"-,.(A)t6b(A)16,851(A)1020(i)Xis the pointin timecalculatedby the methodof equatedtime.(ii) Y is the exact pointin time.CalculateX+Y.013.442.Gertrudedeposits10,000inabank.Duringthefirstyearthebankcreditsanannualeffectiverateof interesti. Duringthe secondyearthe bankcreditsan annualeffectiverateof interest(i -5%).Attheendof two yearsshe has12,093.75in the bank.WhatwouldGertrudehavein the bankat theendof threeyearsif the annualeffectiverateof interestwere (i+9%) for each of the three years?(i)The amountin Fund A at time zero is 1000.(ii)The amountin FundB at time zero is 500.(iii)Theamountin FundC at any timet,fort2: 0, is equalto the sum of the amountsinFundA and Fund B.Fund C accumulatesat a force of interestDt,fort2: O.3.John borrows1000 from Janeat an annualeffectiverate of interesti. He agrees to pay back1000 aftersix yearsand1366.87afteranothersix years.Threeyearsafter his first paymentJohn repaysthe outstandingbalance.Whatis the amountof John'ssecond payment?4.Paymentsof 300,500and700 are made at the end of years five,six, and eight, respectively.Interestis accumulatedat an annualeffectiverate of 4%. You are to find the point in time atwhicha singlepaymentof1500isequivalenttotheaboveseriesof payments.Youareg1Ven:Il-235.An annuity-immediatepaysan initial benefitof 1 per year,increasingby 10.25% every fouryears.Theannuityis payablefor 40 years.Usingan annualeffectiveinterestrate of 5%,determinean expressionfor the presentvalue of this annuity.(C) 2a2016.Youare givenan annuity-immediatepaying10 for10 years,then decreasingby1 per yearfor nine yearsand paying1 per year thereafter,forever.The annualeffective rate of interestis 4%. Calculatethe presentvalue of this annuity.f)119(B)121(C)123(D)125(E)1277.Whichof the followingare true?1.(ani-%)(1+i)=an-IJIl.The presentvalueof a10-year temporaryannuity-immediatepaying10 per monthforthe first 8 monthsof each year is 120 . alOi .a~~~)21'Ill.Thepresentvalueofa perpetuitypayingoneat theendof each year,exceptpayings-nothingeveryfourthyear,ist . ~_ .4J(A)I&IT(B)I&III(C)IT&III(D)All(E)None of A, B, C, D(E)74,400(D)70,700(C)70,100(B)68,5008.Humphreypurchasesa100,000home.Mortgagepaymentsare to be made monthlyfor 30years,with the first paymentto be madeone monthfrom now.The annual effectiverate ofinterestis 5%. After10 yearsthe amountof each monthlypaymentis increasedby 325.40in order.torepaythe mortgagemore quickly.Calculatethe amountof interest paidover thedurationof the loan....
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MATH 320 Practice Test 6 - II-22PRACTICEMULTIPLECHOICETEST

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