Compound Interest problems
- 1. Sharon Stone deposits $2000 at the end of each year in an account earning 10% compounded annually. Determine how much money she has after 25 years. How much interest did she earn?
Options- A. 146694.12
- B. 13452
- C. 18232
- D. 15627 Discuss
Correct Answer: 146694.12
Explanation:
S=R[(1+i)^n-1]/i
- 2. Sharon Stone deposits $500 at the beginning of each 3 months in an account earning 10% compounded quarterly. Determine how much money she has after 25 years
Options- A. 22681.19
- B. 23456
- C. 44577
- D. 25685 Discuss
Correct Answer: 22681.19
Explanation:
S=R[(1+i)^n-1)/i]
- 3. What lump sum deposited today would allow payments of $2000/year for 7 years at 5% compounded annually?
Options- A. 11572.71
- B. 11876
- C. 189756
- D. 11576 Discuss
Correct Answer: 11572.71
Explanation:
A=R[(1+i)^n-1]/i(1+i)^n
- 4. Kashundra Jones plans to make a lump sum deposit so that she can withdraw $3,000 at the end of each quarter for 10 years. Find the lump sum if the money earns 10% per year compounded quarterly
Options- A. 75263.64
- B. 76345
- C. 76389
- D. 56897 Discuss
Correct Answer: 75263.64
Explanation:
A=R[(1+i)^n-1]/i(1+i)^n
- 5. 15 semiannual payments are made into a sinking fund at 7% compounded semiannually so that $4850 will be present. Find the amount of each payment rounded to the nearest cent
Options- A. 251.35
- B. 245.45
- C. 235.87
- D. 251 Discuss
Correct Answer: 251.35
Explanation:
R=S[i/(1+i)^n-1]
- 6. A retirement benefit of $12,000 is to be paid every 6 months for 25 years at interest rate of 7% compounded semi-annually. Find (a) the present value to fund the end-of-period retirement benefit. (b) the end-of-period semi-annual payment needed to accumulate the value in part (a) assuming regular investments for 30 years in an account yielding 8% compounded semi-annually
Options- A. 245678
- B. 234689
- C. 281468.06
- D. 234578 Discuss
Correct Answer: 281468.06
Explanation:
R=S[i/(1+i)^n-1]
- 7. Find the finance charge for an average daily balance of $8431.10 with monthly interest rate of 1.4%
Options- A. 98.04
- B. 88.04
- C. 68.04
- D. 118.04 Discuss
Correct Answer: 118.04
Explanation:
0.014*8431.10
- 8. A loan is made for $3500 with an interest rate of 9% and payments made annually for 4 years. What is the payment amount?
Options- A. 8906
- B. 1089
- C. 1070
- D. 1080.34 Discuss
Correct Answer: 1080.34
Explanation:
A=R[(1+i)^n-1]/i(1+i)^n
- 9. A loan is made for $4800 with an APR of 12% and payments made monthly for 24 months. What is the payment amount? What is the finance charge?
Options- A. 622.80
- B. 522.80
- C. 322.80
- D. 632.80 Discuss
Correct Answer: 622.80
- 10. Calculate the periodic interest rate corresponding to:9.0% compounded quarterly
Options- A. 3.45
- B. 2.25
- C. 5.25
- D. 6.25 Discuss
Correct Answer: 2.25
Explanation:
i=j/m
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