# MATH125 U4 submission problem set(5)

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MATH125: Unit 4 Submission Assignment Answer Form
Number Sense, Estimation, and Financial Computations
ALL questions below regarding CONSUMER CREDIT and SAVING FOR RETIREMENT must be answered.
Show ALL step-by-step calculations, round all of your final answers correctly, and include the units of
measurement. Upload this modified Answer Form to the intellipath Unit 4 Submission lesson. Make sure
you submit your work in a modified MS Word document; handwritten work will not be accepted. If you
CONSUMER CREDIT
For big purchases, many stores offer a deferred billing option (buy now, pay later) that allows shoppers
to buy things now without paying the bill at checkout.
1. Assume you bought new appliances for your newly renovated home. Using the table range
values below, choose one total value for the appliances that you have purchased based on
the first letter of your last name. Denote this by P. It does not necessarily have to be a whole
number.
First letter of your last name
Possible range values for P
AF
\$4,000\$4,999
GL
\$5,000\$5,999
MR
\$6,000\$6,999
SZ
\$7,000\$7,999
Type your chosen value here: (4 points)
Total value of the appliances, P
\$
2. The store where you bought these appliances offered you a provision that if you pay the bill
within 3 years, you will not be charged any interest for your purchases. However, if you are
even a day late in paying the bill, the store will charge you interest for the 3 years.
Choose an interest rate between 12% and 16%. Denote this by r, and convert your answer
into decimal form. (4 points)
Annual interest rate in decimal form, r

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3. Suppose you forget about the bill and pay it 1 day late. How much interest do you pay if the
store charges you simple interest? Because this is a dollar value, round your answer to the
nearest cent. (Assume t = 3 years.)
Interest, I
Show and explain your work here: (5 points)
4. How much is your total billthe total value of the appliances plus the interest? Round your
Total bill (simple interest)
Show and explain your work here: (5 points)
5. How much is your total bill if, instead, the store charges you interest that is compounded
nearest cent. (Assume t = 3 years.)
Total bill (compound interest)
Show and explain your work here: (6 points)
6. How much interest do you pay if it is compounded daily? Round your answer to the nearest
cent.
Interest, I
Show and explain your work here: (5 points)

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