Multiple Choice
Identify the
choice that best completes the statement or answers the question.
|
|
|
1.
|
 Jessie purchased a used car from a small business. They offered to let him finance or
borrow $3200 for a term of 2 years at 11% a year using Simple Interest.
How much
interest will Jessie have to pay the used car dealer?
|  I =
P·R·T | | |
a. | $176 | c. | $387.20 | b. | $352 | d. | $704 |
|
|
|
2.
|
 | Sarah opens a savings account that has a 2.75% annual interest rate, compounded monthly. She
deposits $500 into the account. How much will be in the account after 15 years? | | | |
a. | $500.00 | c. | $1255.27 | b. | $754.94 | d. | $255.27 |
|
|
|
3.
|
 | Jackson deposited $5,000 at 3.8% interest rate, compounded continuously, when he was 18
years old. How much will be in the account when he is 40 years old if he made no other deposits or
withdrawals? | | | |
a. | $10,000 | c. | $11,024.91 | b. | $11,535.60 | d. | $23,650.87 |
|
|
|
4.
|
Which investment would be worth the most after 20
years?
a. | An initial investment of $3000 compounded
annually at a rate of 12% after 20 years.
| b. | An initial investment of $3000
compounded quarterly at a rate of 11.9% after 20
years.
| c. | An initial
investment of $3000 compounded continuously at a rate of 11.8% after 20
years.
|
|
|
|
5.
|
 Ms.
Morrison is purchasing a house and needs to finance a $150,000 mortgage from the bank with an annual
percentage rate (APR) of 3.8%. She is financing it over 30 years and making monthly payments. What is
the monthly payment?
 | | | |
a. | $416.67 | c. | $833.33 | b. | $698.94 | d. | $1393.88 |
|