MGF 1107 Spring 11 Ref: Review for Exam 2. Write as a percent. 1) 3.1 1) Write as a decimal. 4) 60% 4) 5) 0.085% 5)

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1 MGF 1107 Spring 11 Ref: Review for Exam 2 Mr. Guillen Exam 2 will be on 03/02/11 and covers the following sections: 8.1, 8.2, 8.3, 8.4, 8.5, 8.6. Write as a percent. 1) 3.1 1) 2) 1 8 2) 3) 7 4 3) Write as a decimal. 4) 60% 4) 5) 0.085% 5) 6) 2 5 % 6) Solve the problem. Round to the nearest hundredth. 7) 48% of what number is 79? 7) 8) What is 84% of 492? 8) 9) What is 38% of 1687? 9) 10) $ is what percent of $68.91? 10) 11) What percent of 189 is 12.07? 11) 12) 976 is what percent of 1588? 12) Solve the problem. 13) The regular selling price of an item is $292. For a special year-end sale the price is at a markdown of 20%. Find the discount sale price. 13) 14) The regular selling price of an item is $194. For a special year-end sale the price is at a markdown of 20%. Find the discount sale price. 14) 15) Brand X copier advertises that its copiers run 25% longer between service calls than its competitor. If Brand X copiers run 32,200 copies between services, how many copies would the competitor run? 15) 16) Midtown Antiques collects 6% sales tax on all sales. If total sales including tax are $ , find the portion that is the tax amount. 16)

2 17) Midtown Antiques collects 3% sales tax on all sales. If total sales including tax are $ , find the portion that is the tax amount. 17) Find the simple interest. The rate is an annual rate unless otherwise noted. Assume 360 days in a year and 30 days per month. 18) Principal = $ ) Rate = 7% Time in years = ) Principal = $1900 Rate = 8.4% 19) Time in years = ) Principal = $1275 Rate = 9% Time in days = 15 20) Find the simple interest. Assume a 360-day year. Round results to the nearest cent. 21) $50,052 at 7.2% for 23 months 21) 22) $27,000 at 5% for 125 days 22) 23) $3890 at 8% for 292 days 23) 24) $13,271 at 9.4% for 8 months 24) Use the simple interest formula to find the missing value. Rates are annual rates. Assume 360 days per year and 30 days per month. 25) p = $12,989, r = 8%, t =?, i = $ ) 26) p = $6289, r =?, t = 9 months, i = $ ) Solve the problem. Assume that simple interest is being calculated in each case. Round your answer to the nearest cent. 27) Allan borrowed $4000 from his father to buy a car. He repaid him after 5 months with 27) interest of 6% per year. Find the total amount he repaid. 28) Anita Tooms bought a new computer system. To pay for the system, she borrowed $5560 from the credit union at 11 1 % simple interest for 105 days. Find the interest owed. (Use a 6 28) 365 day year.) 29) Skyway Marketing, Ltd. bought a new computer system. To pay for the system, they borrowed $34,800 at 11 1 % interest for 215 days. Find the interest owed. (Use a 365 day 3 29) year.)

3 Find the amount that should be invested now to accumulate the following amount, if the money is compounded as indicated. 30) $12,800 at 4% compounded annually for 15 yr 30) 31) $4000 at 9% compounded semiannually for 7 yr 31) 32) $4700 at 9% compounded quarterly for 2 yr 32) Find the compound amount for the deposit. Round to the nearest cent. 33) $18,000 at 3% compounded semiannually for 5 years 33) 34) $1570 at 3% compounded annually for 10 years 34) 35) $4320 at 5% compounded semiannually for 5 years 35) Solve the problem. 36) A small company borrows $90,000 at 7% compounded monthly. The loan is due in 4 years. How much interest will the company pay? 36) 37) Barry Newmanʹs savings account has a balance of $2770. After 18 years, what will the amount of interest be at 5% compounded annually? 37) 38) A municipal bond with a face value of $5000 in ten years can be purchased now for $2345. Find the simple interest rate. Round to the nearest tenth of a percent. 38) 39) The State Employeesʹ Credit Union offers a 1-year certificate of deposit with an APR (or effective rate) of 4.8%. If interest is compounded quarterly, find the actual interest rate. Round to the nearest tenth of a percent. 39) 40) John Leeʹs savings account has a balance of $1714. After 2 years, what will the amount of interest be at 6% compounded semiannually? 40) 41) Barbara knows that she will need to buy a new car in 6 years. The car will cost $15,000 by then. How much should she invest now at 12%, compounded quarterly, so that she will have enough to buy a new car? 41) Solve. 42) How long will it take for $7700 to grow to $43,000 at an interest rate of 2.9% if the interest is compounded continuously? Round the number of years to the nearest hundredth. 42) 43) Suppose that $10,000 is invested at an interest rate of 5.7% per year, compounded continuously. What is the doubling time? 43) 44) Suppose that $11,000 is invested at an interest rate of 5.5% per year, compounded continuously. What is the balance after 10 years? 44) 45) Randy invested his inheritance in an account that paid 6.8% interest, compounded continuously. After 5 years, he found that he now had $52, What was the original amount of his inheritance? 45)

4 46) Kimberly invested $7000 in her savings account for 5 years. When she withdrew it, she had $ Interest was compounded continuously. What was the interest rate on the account? 46) Find the effective rate corresponding to the given nominal rate. Round results to the nearest 0.01 percentage points. 47) 13% compounded semiannually 47) 48) 10% compounded quarterly 48) Solve the problem. 49) Determine the effective annual yield for $1 invested for 1 year at 8% compounded quarterly. 49) 50) Determine the effective annual yield for $1 invested for 1 year at 7% compounded monthly. 50) 51) You have a choice of two accounts in which to invest your money for one year. Account A pays 6.1% simple interest rate and account B pays 5% interest compounded daily. Compute the effective annual yield of account B and determine which account has the better rate. (Assume that there are 360 days in a year.) 51) Find the future value of the ordinary annuity. Interest is compounded annually, unless otherwise indicated. 52) R = $100, i = 0.06, n = 13 52) 53) R = $900, i = 5% interest compounded semiannually for 14 years 53) 54) R = $10,000, i = 3% interest compounded quarterly for 3 years 54) Find the future value of the annuity due. 55) $800 deposited at the beginning of each year for 12 years at 10% compounded annually 55) 56) $200 deposited at the beginning of each quarter for 12 years at 8% compounded quarterly 56) 57) $800 deposited at the beginning of each year for 14 years at 10% compounded annually 57) Find the periodic payment that will render the sum. 58) S = $350,000, interest is 10% compounded semiannually, payments made at the end of each semiannual period for 8 years 58) 59) S = $16,000, interest is 18% compounded monthly, payments made at the end of each month for 3 years 59) 60) S = $57,000, interest is 12% compounded quarterly, payments are made at the end of each quarter for 5 years 60) Solve the problem. Round to the nearest cent. 61) If Bob deposits $5,000 at the end of each year for 8 years in an account paying 5% interest compounded annually, find the amount he will have on deposit. 61)

5 62) $ is deposited at the end of each month for 4 years in an account paying 12% interest compounded monthly. Find the amount of the account. 62) 63) At the end of every 3 months, Teresa deposits $100 into an account that pays 5% compounded quarterly. After 4 years, she puts the accumulated amount into a certificate of deposit paying 8.5% compounded semiannually for 1 year. When this certificate matures, how much will Teresa have accumulated? 63) Solve the problem. 64) If $600,000 is to be saved over 25 years, how much should be deposited annually if the investment earns 6.25% interest compounded annually? 64) Find the lump sum deposited today that will yield the same total amount as this yearly payment (made at the end of each year for 20 years at the given interest rate, compounded annually. 65) $10,000 at 4% 65) 66) $2200 at 6% 66) 67) $3500 at 4% 67) Use an annual percentage rate table to solve the problem. 68) In order to make some home improvements, a home owner spent $20,000. He paid 20% as a down payment and financed the balance of the purchase with a 36-month fixed installment loan with an APR of 4.5%. Determine the home ownerʹs total finance charge and monthly payment. 68) 69) A cattle rancher needs to construct a new silo in which to store cattle feed. The silo will cost $2000. The rancher pays 15% as a down payment and finances the balance for 60 months at an APR of 7.50%. Determine the rancherʹs total finance charge and monthly payment. 69) 70) A restaurant owner purchased a new dishwasher for $2000. She paid 10% down and financed the balance with a 12-month fixed installment loan with an APR of 8.5%. Determine the total finance charge and monthly payment for the loan. 70) 71) A family purchased a new ski boat for $20,000. The loan agency required a 8% down payment and financed the balance for 36 months with an APR of 6.0%. Determine the total finance charge and monthly payment for the loan. 71) 72) A homeowner installed new kitchen cabinets and countertops for $6500. He paid 20% down and financed the balance with a 24-month fixed installment loan with an APR of 7.0%. Determine the total finance charge and monthly payment for the loan. 72) Find the monthly house payment necessary to amortize the following loan. 73) In order to purchase a home, a family borrows $156,000 at 7.2% for 15 yr. What is their monthly payment? Round the answer to the nearest cent. 73) 74) In order to purchase a home, a family borrows $396,000 at 9.6% for 15 yr. What is their monthly payment? Round the answer to the nearest cent. 74)

6 75) In order to purchase a home, a family borrows $398,000 at 13.9% for 30 yr. What is their monthly payment? Round the answer to the nearest cent. 75) Find the payment necessary to amortize the loan. 76) $13,100; 12% compounded monthly; 48 monthly payments 76)

7 Answer Key Testname: MGF_1107_SPRING_11_EXAM_2_REVIEW 1) 310% 2) 12.5% 3) 175% 4) 0.6 5) ) ) ) ) ) % 11) 6.39% 12) 61.46% 13) $ ) $ ) 25,760 copies 16) $ ) $ ) $ ) $ ) $ ) $ ) $ ) $ ) $ ) t = 2 years 26) r = 6.5% 27) $ ) $ ) $ ) $ ) $ ) $ ) $20, ) $ ) $ ) $28, ) $ ) 7.9% 39) 4.7% 40) $ ) $ ) yr 43) 12.2 yr 44) $19, ) $37,656 46) 2.5% 47) 13.42% 48) 10.38% 49) 8.24% 50) 7.23% 51) Account A

8 Answer Key Testname: MGF_1107_SPRING_11_EXAM_2_REVIEW 52) $ ) $35, ) $125, ) $18, ) $16, ) $24, ) $14, ) $ ) $ ) $47, ) $46, ) $ ) $10, ) $135, ) $25, ) $47, ) Total finance charge = $ ; Monthly payment = $ ) Total finance charge = $343.91; Monthly payment = $ ) Total finance charge = $83.88; Monthly payment = $ ) Total finance charge = $ ; Monthly payment = $ ) Total finance charge = $387.40; Monthly payment = $ ) $ ) $ ) $ ) $344.97

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