Thomas Hodges
MAT104, section 066VA016, Summer 1 2014
Instructor: SONYA MC QUEEN
Due : Wednesday, August 13 2014 09:00 AM EDT

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Homework 6: Financial Management (Chapter 11) (Homework)
Current Score : 27.85 / 30

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1. 1.57/1.57 points | Previous AnswersSmithNM12 11.1.019.

Calculate the amount of simple interest earned.
$1,000 at 17% for 20 years
$ 3400

3,400

2. 1.57/1.57 points | Previous AnswersSmithNM12 11.1.022.C MI.

Find the future value, using the future value formula and a calculator. (Round your answer to the nearest cent.)
$982 at 5.5% compounded quarterly for 7 years
$ 1439.38

1,439.38

3. 0/1.57 points | Previous AnswersSmithNM12 11.1.030.

Find the present value, using the present value formula and a calculator. (Round your answer to the nearest cent.)
Achieve $225,500 at 8.55% compounded continuously for 8 years, 155 days.
$ 108344.78

109,728.81

4. 1.38/1.57 points | Previous AnswersSmithNM12 11.1.032.

If $31,500 is invested at 6.8% for 30 years, find the future value if the interest is compounded the following ways. (Round your answers to the nearest cent.)
(a) annually
$ 226698.23

226,698.23

(b) semiannually
$ 234176.27

234,176.27

(c) quarterly
$ 238135.92

238,135.92

(d) monthly
$ 240863.24

240,863.24

(e) daily
$ 242207.67

242,207.53

(f) every minute (N = 525,600)
$ 242254.17

242,254.16

(g) continuously
$ 242254.19

242,254.19

(h) simple (not compounded)
$ 95760

95,760.00

5. 1.57/1.57 points | Previous AnswersSmithNM12 11.1.046.

Suppose that an insurance agent offers you a policy that will provide you with a yearly income of
$50,000 in 30 years. What is the comparable salary today, assuming an inflation rate of 6% compounded annually? (Round your answer to the nearest cent.)
$ 8705.51

8,705.51

6. 1.57/1.57 points | Previous AnswersSmithNM12 11.2.025.

Convert the credit card rate to the APR.
1
% per month
4
27 %

Oregon, 2
27

7. 1.57/1.57 points | Previous AnswersSmithNM12 11.2.031.

Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. (Round your answers to the nearest cent.)
$300 balance, 17%, $50 payment
(a) previous balance method
$ 4.25

4.25

(b) adjusted balance method
$ 3.54

3.54

(c) average daily balance method
$ 3.73

3.73

8. 1.18/1.57 points | Previous AnswersSmithNM12 11.2.045.

Assume the car can be purchased for 0% down for 60 months (in lieu of rebate).
A car with a sticker price of $42,450 with factory and dealer rebates of $5,100
(a) Find the monthly payment if financed for 60 months at 0% APR. (Round your answer to the nearest cent.)
$ 707.50

707.50

(b) Find the monthly payment if financed at 2.5% add-on interest for 60 months. (Round your answer to the nearest cent.)
$ 795.94

700.31

(c) Use the APR approximation formula to find the APR for part (b). (Round your answer to one decimal place.)
4.9

4.9 %

(d) State whether the 0% APR or the 2.5% add-on rate should be preferred.
0% APR
2.5% add-on rate

9. 1.57/1.57 points | Previous AnswersSmithNM12 11.2.048.

For the car loan described, give the following information.
A newspaper advertisement offers a $4,500 used car for nothing down and 36 easy monthly payments of $149.62.
(a) amount to be paid
$ 5386.32

5,386.32

(b) amount of interest
$ 886.32

886.32

(c) interest rate (Round your answer to two decimal places.)
6.57

6.57 %

(d) APR (rounded to the nearest tenth percent)
12.8

12.8 %

10.1.57/1.57 points | Previous AnswersSmithNM12 11.2.059.

Karen and Wayne need to buy a refrigerator because theirs just