# MCQs-Mathematics of Finance

20 MC Questions on mathematics of Finance. Example:

1.

Find the present value of the future amount. Assume 365 days in a year. Round to the nearest cent.

$18,350 for 119 days; money earns 3.3%

A) $195.32

B) $18,156.30

C) $17,763.79

D) $18,154.68

2.

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

a = 3, r = -4

A) 1023

B) 615

C) -1023

D) -615

3.

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

a = 12, r = 4

A) 252

B) 7710

C) 268

D) 4092

4.

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

$49,000; discount rate 5%; length of loan 6 mo

A) 6.1%

B) 5.1%

C) 4.1%

D) 7.1%

5.

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

$830 at 7% compounded annually for 20 years

A) $1103.90

B) $2171.72

C) $1162.00

D) $2381.84

6.

Find the compound amount for the deposit. Round to the nearest cent.

$1900 at 10% compounded quarterly for 4 years

A) $2097.24

B) $2781.79

C) $2660.00

D) $2820.56

7.

Solve the problem.

Tuition of $2600 is due when the spring term begins, in What amount should a student deposit today, at to have enough to pay tuition?

A) $2452.83

B) $111.96

C) $2500.00

D) $2488.04

8.

Find the monthly house payment necessary to amortize the following loan.

In order to purchase a home, a family borrows at 8.8% for What is their monthly payment? Round the answer to the nearest cent.

A) $4023.64

B) $792.00

C) $853.50

D) $1244.22

9.

Find the present value of the ordinary annuity.

Payments of $3900 made annually for at 9% compounded annually

A) $38,269.14

B) $38,723.10

C) $37,853.40

D) $38,308.05

10.

Find the exact interest. Use 365 days in a year, and use the exact number of days in a month. Round to the nearest cent, if necessary.

A loan of $97,000 at 13% made on Feb 18 and due on June 30

A) $4728.75

B) $4560.33

C) $4663.97

D) $4623.67

11.

Find the periodic payment that will render the sum.

S = $55,000, interest is 4% compounded annually, payments made at the end of each year for

A) $5170.81

B) $4471.66

C) $10,154.50

D) $3304.20

12.

Find the periodic payment that will render the sum.

S = $23,000, interest is 18% compounded monthly, payments made at the end of each month for

A) $486.51

B) $6438.25

C) $612.70

D) $509.80

13.

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

$20,625 at 12% compounded continuously for 5 years

A) $37,581.20

B) $37,577.49

C) $13,377.58

D) $14,353.97

14.

Find the compound amount for the deposit. Round to the nearest cent.

$5000 at 7% compounded semiannually for 8 years

A) $7800.00

B) $6584.05

C) $8669.93

D) $8590.93

15.

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

a = , r = 2

A)

B)

C)

D)

16.

Find the present value of the future amount. Assume 365 days in a year. Round to the nearest cent.

$18,000 for 9 months; money earns 8.5%

A) $16,589.86

B) $16,921.27

C) $17,034.70

D) $17,915.00

17.

Find the sum of the first five terms of the geometric sequence. (Please see the attachment)

a = , r = 2

A)

B)

C)

D)

18.

Find the interest. Round to the nearest cent.

$1390 at 7.5% for 2 months

A) Interest = $52.12

B) Interest = $1737.50

C) Interest = $208.50

D) Interest = $17.38

19.

Find the interest. Round to the nearest cent.

$2180 at 15% for 22 months

A) Interest = $59,950.00

B) Interest = $599.50

C) Interest = $14.86

D) Interest = $7194.00

20.

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

$3000 at 8% compounded semiannually for 8 yr

A) $5618.94

B) $1620.81

C) $1601.72

D) $1398.28

#### Solution Summary

The solution provides answers to multiple choice questions on present value, future value, compound interest, geometric sequence, simple interest, periodic payment and amortization of loan.