# 25 Multiple Choice Questions

1.Find the interest. Round to the nearest cent.

$1280 at 12% for 9 months

A) Interest = $17.07

B) Interest = $115.20

C) Interest = $1382.40

D) Interest = $11,520.00

2. Find the value.

s 15,0.09 (Please refer to the attachments)

A) 33.003

B) 40.472

C) 29.361

D) 26.019

3. Find the actual interest rate paid, to the nearest tenth, on the simple discount note.

$50,000; discount rate 8%; length of loan 6 months.

A) 9.3%

B) 8.3%

C) 7.3%

D) 10.3%

4. Solve the problem.

How much must Harry's Hardware deposit be at 12.5% interest for 120 days in order to earn $600.00 interest?

A) $14,400

B) $14,600

C) $7200

D) $4800

5. Find the periodic payment that will render the sum.

S = $65,000, interest is 4% compounded annually, payments made at the end of each year for 5years.

A) $6110.96

B) $5284.68

C) $12,000.77

D) $3904.96

6. Find the compound amount for the deposit. (Round to the nearest cent).

$5000 at 7% compounded annually for 6 years.

A) $7012.76

B) $7100.00

C) $7503.65

D) $6750.00

7. Find the future value of the ordinary annuity. Interest is compounded annually, unless otherwise indicated.

R = $900, i = 7% interest compounded semiannually for 10years.

A) $23,637.33

B) $23,721.46

C) $25,451.71

D) $51,166.00

8. Find the value.

s 17, 0.01 (Please refer to the attachments)

A) 50.396

B) 44.501

C) 39.19

D) 53.592

9. Find the compound interest earned by the deposit. (Round to the nearest cent).

$1800 at 6% compounded quarterly for 6 years

A) $648.00

B) $753.33

C) $1968.20

D) $773.11

10. Find the amount that should be invested now to accumulate the following amount, if the money is compounded as indicated.

$12,400 at 12.6% compounded continuously for 6 years.

A) $5822.31

B) $25,168.77

C) $4582.31

D) $26,408.77

11. Find the effective rate corresponding to the given nominal rate. Round results to the nearest 0.01 percentage points.

14% compounded monthly

A) 14.49%

B) 14.93%

C) 3.82%

D) 14.75%

12. Find the payment necessary to amortize the loan.

$1600; 12% compounded quarterly; 8 quaterly payments.

A) $227.99

B) $322.09

C) $227.93

D) $205.49

13. Find the periodic payment that will render the sum.

S = $26,000, interest is 18% compounded monthly, payments made at the end of each month for 3years.

A) $549.96

B) $7278.02

C) $692.62

D) $576.30

14. Find the value.

s 21,0.038 (Please refer to the attachment)

A) 31.276

B) 29.168

C) 33.465

D) 57.592

15. Find the compound interest earned by the deposit. (Round to the nearest cent).

$710 at 9% compounded annually for 8 years.

A) $447.30

B) $587.91

C) $511.20

D) $704.72

16. Find the actual interest rate paid, to the nearest tenth, on the simple discount note.

$36,000; discount rate 6.0%; length of loan 4 months.

A) 5.1%

B) 8.1%

C) 6.1%

D) 7.1%

17. Find the amount of each payment to be made into a sinking fund so that enough will be present to accumulate the following amount. Payments are made at the end of each period. The interest rate given is per period.

$90,000; money earns 7% compounded semiannually for 16 and a half years.

A) $1569.74

B) $1012.23

C) $1418.37

D) $1491.52

18. Find the compound interest earned by the deposit. (Round to the nearest cent).

$15,000 at 4% compounded quarterly for 1/2year.

A) $1224.00

B) $301.50

C) $1200.00

D) $297.06

19. Find the indicated term of the geometric sequence.

a = 5, r =3/4 ; Find the 3rd term.

A) 16/45

B) 64/135

C) 135/64

D) 45/16

20. Find the indicated term of the geometric sequence.

a = 1/3 , r = 1/2 ; Find the 8th term.

A) 1/128

B) 1/768

C) 1/384

D) 1/48

21. Find the present value of the ordinary annuity.

Payments of $2000 made annually for 10years at 12% compounded annually.

A) $11,875.40

B) $11,300.45

C) $12,955.00

D) $11,304.40

22. Find the future value of the ordinary annuity. Interest is compounded annually, unless otherwise indicated.

R = $2500, i = 7% interest compounded quarterly for 16years.

A) $98,536.84

B) $290,758.26

C) $433,615.41

D) $283,300.51

23. Find the effective rate corresponding to the given nominal rate. Round results to the nearest 0.01 percentage points.

9% compounded monthly.

A) 1.81%

B) 9.38%

C) 9.31%

D) 9.20%

24. Solve the problem.

Novelties-and-Such borrowed $6700 for 75days and paid $213.39 in interest. Find the rate of interest on the loan.

A) 16.0%

B) 15.7%

C) 15.5%

D) 15.0%

25. Find the sum of the first five terms of the geometric sequence.

a =3/2 , r = 2

A) 1/4

B) 93

C) 5

D) 93/2

#### Solution Preview

1. B

2. C

3. The correct answer will be 4%, which is not given in the options.

4. ...

#### Solution Summary

This solution is comprised of detailed explanation and step-by-step calculation of the given problems and provides students with a clear perspective of the underlying concepts.