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Complete the math problems below. Show your work. Need today 17 January by 11pm EST.

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Assignment: Assignment la (Sections 3.1 �

Date: 1/17/13

3.2)

Time: 10:54 AM

8.

9.

A radio commercial for a loan company states: “You only pay 36¢ a day for each $500 borrowed.” If you borrow $2,322 for 191 days, what amount will you repay, and what annual interest rate is the company actually charging?

(Assume a 360-day year.)

a. Amount you repay =

$

(Round to two decimal places.)

b. Annual interest rate =

% (Round to four decimal places.)

10.

Use the commission schedule from Company B shown in the table to find the annual rate of interest earned on the investment. (Note: commisions are

Principal (Value of Stock)

Commission

Under $3,00

0

$32 + 1.8% of principal

$3,000 – $10,000 Over $10,000

$56 + 1.% of principal

rounded to the nearest cent.)

$106 + 0.5% of principal

An investor purchases 301 shares at $39.19 a share, holds the stock for 319 days, and then sells the stock for $47.79 a share. Assume a 360-day year.

The annual rate of interest is

%. (Round to three decimal places.)

11.

Many tax preparation firms offer their clients a refund anticipation loan (RAL). For a fee, the firm will give a client his refund when the return is filed. The loan is repaid when the Internal Revenue Service sends the refund directly to the firm. Thus, the RAL fee is equivalent to the interest charge for a loan. The schedule in the table on the right is from a major RAL lender. Use this schedule to fmd the annual rate of interest for a $1,130 RAL, which is paid back in 18 days.

RAL Amount

RAL Fee

$0 – $500

$29.00

$501 – $1,000

$39.00

$1,000 – $1,500

$49.00

$1,501 – $2,000

$69.00

$2,001 – $5,000

$89.00

(Assume a 360-day year.)

What is the annual rate of interest for this loan?

% (Round to three decimal places.)

12.

Use the compound interest formula to find the future value A for the following values.

P = $1,500

i = 0.047

n = 24

A = $

(Round to the nearest cent.)

Page 2

Assignment: Assignment la (Sections 3.1 �

Date: 1/17/13

3.2)

Time: 10:54 AM

13.

Use the compound interest formula to find the present value P, for the following given values.

A = $17,600

i = 0.042

n = 102

P = $

(Round to the nearest cent.)

14.

Given the annual interest rate and the compounding period, find i, the interest rate per compounding period.

8% compounded monthly

% per month

(Type an integer or decimal rounded to the nearest thousandth as needed.)

15.

Given the rate per compounding period, find r, the annual rate.

2.25% per quarter

r =

% (Round to three decimal places as needed.)

Page 3

Assignment: Assignment la (Sections 3.1 �

Date: 1/17/13

3.2)

Time: 10:54 AM

16.

If $650 is invested at 12% compounded

(A) annually,

(B) quarterly,

(C) monthly,

what is the amount after 6 years?

How much interest is earned?

(A) If it is compounded annually, what is the amount?

$

(Round to the nearest cent.)

How much interest is earned?

$

(Round to the nearest cent.)

(B) If it is compounded quarterly, what is the amount?

$

(Round to the nearest cent.)

How much interest is earned?

$

(Round to the nearest cent.)

(C) If it is compounded monthly, what is the amount?

$

(Round to the nearest cent.)

How much interest is earned?

$

(Round to the nearest cent.)

17.

If $18,000 is invested at 5% compounded quarterly, what is the amount after 6 years?

The amount after 6 years will be $

(Round to the nearest cent.)

Page 4

Assignment: Assignment la (Sections 3.1 �

Date: 1/17/13

3.2)

Time: 10:54 AM

18.

An investment company pays 4% compounded semiannually. You want to have $16,000 in the future.

(A) How much should you deposit now to have that amount 5 years from now?

$

(Round to the nearest cent.)

(B) How much should you deposit now to have that amount 10 years from now?

$

(Round to the nearest cent.)

19.

A newborn child receives a $6,000 gift toward a college education from her grandparents. How much will the $6,000 be worth in 18 years if it is invested at 4.9% compounded quarterly?

It will be worth $

(Round to the nearest cent.)

20.

Rental costs for office space have been going up at 8.9% per year compounded annually for the past 7 years. If office space rent is now $30 per square foot per month, what were the rental rates 7 years ago?

The rates 7 years ago were about $

per square foot.

(Round to two decimal places as needed.)

21.

Which is the better investment: 8.1% compounded monthly or 8.8% compounded annually?

0

8.8% compounded annually.

0

8.1% compounded monthly.

22.

An Individual Retirement Account (IRA) has $20,000 in it, and the owner decides not to add any more money to the account other than interest earned at 4% compounded daily. How much will be in the account 39 years from now when the owner reaches retirement age?

There will be $

in the account.

(Round to the nearest cent. Use a 365-day year.)

Page 5

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