# Week 5 Questions- finite mathematics

**Question description**

1. Find the simple interest on a $400 investment made for 5 years at an interest rate of 7%/year. What is the accumulated amount?

2. If the accumulated amount is $3,720 at the end of 3 years and the simple rate of interest is 8%/year, what is the principal?

3. Find the accumulated amount A if the principal P = $2,000 is invested at the interest rate of r = 6% per year for t = 6 years, compounded annually.

4. Find the accumulated amount A if the principal P = $11,000 is invested at the interest rate of r = 5% per year for t = 5.5 years, compounded quarterly.

5. Determine the simple interest rate at which $1,500 will grow to $1,550 in the 8 months. Round your answers to the nearest tenth of percent.

6. Find the present value of $40,000 due in 4 years at the given rate of interest 8%/year compounded monthly.

7. In order to help finance the purchase of a new house, the Abdullahs have decided to apply for a short-term loan (a bridge loan) in the amount of $140,000 for a term of 1 mo. If the bank charges simple interest at the rate of 12%/year, how much will the Abdullahs owe the bank at the end of the term?

8. The Kwans are planning to buy a house 6 years from now. Housing experts in their area have estimated that the cost of a home will increase at a rate of 6%/year during that period. If this economic prediction holds true, how much can the Kwans expect to pay for a house that currently costs $160,000?

9. The manager of a money market fund has invested $4.2 million in certificates of deposit that pay interest at the rate of 5.4%/year compounded quarterly over a period of 5 years. How much will the investment be worth at the end of 5 years?

10. Find the effective rate corresponding to nominal rate 6% / year compounded monthly. Round the answers to the nearest hundredth of percent.

11. Find the interest rate needed for an investment of $4,000 to grow to an amount of $5,000 in 4 yr if interest is compounded continuously. Please round the answer to the nearest hundredth of percent.

12. Anthony invested a sum of money 6 yr ago in a savings account that has since paid interest at the rate of 7%/year compounded quarterly. His investment is now worth $19,713.77. How much did he originally invest? Please round the answer to the nearest cent.

13. Georgia purchased a house in 1998 for $220,000. In 2003 she sold the house and made a net profit of $50,000. Find the effective annual rate of return on her investment over the 5-yr period. Please round the answer to the nearest tenth of percent.

14. Find the amount of an ordinary annuity of 10 yearly payments of $1,800 that earn interest at 10% per year, compounded annually.

15. Robin, who is self-employed, contributes $4,000/year into a Keogh account. How much will he have in the account after 15 years if the account earns interest at the rate of 6.5%/year compounded yearly?

16. If a merchant deposits $1,500 annually at the end of each tax year in an IRA account paying interest at the rate of 10%/year compounded annually, how much will she have in her account at the end of 25 years? Round your answer to two decimal places.

18. Juan invested $24,000 in a mutual fund 5 years ago. Today his investment is worth $34,616. Find the effective annual rate of return on his investment over the 5-year period.

19. Find the amount of an ordinary annuity for 5 years of quarterly payments of $2,200 that earn interest at 4% per year compounded quarterly.

20. Find the present value of the ordinary annuity. Please round the answer to the nearest cent.$2,000 per semiannual period for 7 yr at 12%/year compounded semiannually

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