Quiz Questions


1	Quarterly deposits of $450 are made to a fund that earns 11% compounded semiannually. How much money will be in the fund immediately after the 24th deposit?
		A)	$14,947.09
		B)	$15,352.63
		C)	$7861.89
		D)	$15,015.70
		E)	$15,428.63


2	What total interest will be earned over a 10-year period if $1000 is invested at the end of every three months at 15% compounded quarterly?
		A)	$20,550.99
		B)	$49,610.10
		C)	$19,449.01
		D)	$89,610.10
		E)	$52,970.48


3	What is the future value of an ordinary annuity consisting of quarterly payments of $1500 for six years if the interest rate is 10% compounded quarterly for the first four years and 6% compounded quarterly for the last two years?
		A)	$45,396.78
		B)	$35,419.38
		C)	$48,523.55
		D)	$117,749.75
		E)	$42,174.51


4	Herb plans to retire 20 years from now. He sets up an RRSP to which he will contribute $125 at the end of each month for the next twelve years. He intends to make no further contributions for the next eight years. If the RRSP earns 12% compounded monthly, what amount will be in the plan at the date of Herb's retirement?
		A)	$120,617.48
		B)	$119,423.24
		C)	$103,666.01
		D)	$143,877.30
		E)	$142,452.77


5	An annuity contract pays $5000 semiannually for twenty years. What is the present value of the annuity six months before the first payment if money can earn 9% compounded semiannually until the 24th payment, and 6% compounded semiannually thereafter?
		A)	$72,477.39
		B)	$94,315.09
		C)	$19,530.53
		D)	$535,151.62
		E)	$92,007.92


6	If you want to receive $800 at the end of every month for the next ten years, how much would you have to deposit at the beginning of the ten year period? Assume that your money will earn 9% compounded monthly.
		A)	$63,627.00
		B)	$154,811.41
		C)	$63,153.35
		D)	$155,972.49
		E)	$55,972.49


7	A television was purchased on credit by 36 monthly payments of $75. If the first payment was made one month after the date of purchase and the interest rate charged was 16% compounded monthly, what was the price of the television?
		A)	$3436.63
		B)	$2700.00
		C)	$785.34
		D)	$2163.54
		E)	$2133.29


8	Fred purchased an item with $3000 down and monthly payments of $650 for 3-1/2 years. The interest rate charged on unpaid balances was 18% compounded monthly. What was the purchase price of the item?
		A)	$20,146.13
		B)	$17,448.32
		C)	$23,448.32
		D)	$23,146.13
		E)	$20,448.32


9	Susan will deposit $100 at the end of each month to an RRSP for the next 10 years. She will earn 6% compounded monthly on her deposits. If the rate of inflation during the next ten years is 3% pa, what will be the purchasing power of her RRSP in today's dollars?
		A)	$11,341.14
		B)	$10,123.33
		C)	$16,387.93
		D)	$12,194.16
		E)	$13,974.14


10	A car priced at $15,000 is purchased with a down payment of 20% and 36 equal monthly payments. If interest at 14% compounded monthly is charged on the unpaid balance, what is the size of the monthly payment?
		A)	$512.66
		B)	$506.75
		C)	$337.66
		D)	$410.13
		E)	$405.40


11	What single payment now is equivalent to 40 quarterly payments of $950. The first quarterly payment will be three months from now and money can earn 12% compounded monthly?
		A)	$31,504.88
		B)	$46,442.06
		C)	$22,514.73
		D)	$21,852.58
		E)	$31,192.95


12	An item was purchased with a $2000 down payment and 36 monthly payments of $500 beginning six months after the date of purchase. The interest rate charged on the balance owed was 10% compounded semiannually. What was the purchase price?
		A)	$17,668.19
		B)	$16,992.09
		C)	$15,043.92
		D)	$17,043.92
		E)	$14,922.09


13	Fred wants to set up a fund for his daughter's university education. His daughter will start university five years from today. Fred wants her to be able to make 48 quarterly withdrawals of $800 from the fund starting on the date she enters university. If the fund earns 10% compounded quarterly, how much must Fred deposit in the fund today to provide for the payments?
		A)	$13,559.32
		B)	$26,369.63
		C)	$13,898.30
		D)	$22,218.52
		E)	$22,773.99


14	A property was purchased with a down payment of $20,000 and payments of $850 at the end of each month for twenty-five years. The interest charged on the balance owed was 15% compounded semiannually. What was the purchase price of the property?
		A)	$66,363.19
		B)	$88,210.32
		C)	$86,363.19
		D)	$51,460.94
		E)	$68,210.32


15	Referring to the previous question, how much interest was paid?
		A)	$42,500.00
		B)	$186,789.68
		C)	$51,460.94
		D)	$255,000.00
		E)	$166,789.68

2003 McGraw-Hill Higher Education
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