Quiz Questions


1	A rental agreement requires the payment of $1200 per month in advance. What single payment in advance for the year should the landlord accept instead of the monthly payments if money is worth 6% compounded monthly?
		A)	$10,060.61
		B)	$14,012.43
		C)	$13,942.72
		D)	$14,400.00
		E)	$10,664.25


2	An item can be purchased by making 36 monthly payments of $250. The first payment is due on the date of sale, and the interest rate charged is 12% compounded monthly. What is the purchase price of the item?
		A)	$7602.15
		B)	$7526.88
		C)	$10,769.22
		D)	$10,876.91
		E)	$9000.00


3	A car is purchased for monthly payments of $650 for four years. The first payment is due on the date of sale and interest is 6% compounded monthly. What is the purchase price of the car?
		A)	$31,200.00
		B)	$27,677.21
		C)	$35,339.41
		D)	$27,815.59
		E)	None of the above.


4	Twenty-four quarterly deposits of $350 were made to an RRSP that earned 8% compounded quarterly. How much was in the account three months after the last deposit?
		A)	$10,860.61
		B)	$10,647.65
		C)	$10,297.65
		D)	$6752.27
		E)	$6619.87


5	Joan wants to have $100,000 in her RRSP on her 60th birthday. She will make twenty equal annual deposits beginning on her 40th birthday. What annual deposit is required if the plan will earn 7% compounded annually?
		A)	$2279.71
		B)	$9439.29
		C)	$500.91
		D)	$2439.29
		E)	$468.14


6	An investment fund which earns 16% compounded monthly. What minimum number of monthly deposits of $150 would it require to accumulate $5100? Assume that the first deposit is made now.
		A)	27
		B)	28
		C)	29
		D)	45
		E)	32


7	Deposits of $6000 are made at the beginning of every six months for ten years to a fund that earns 12% compounded monthly. How much will be in the fund after ten years?
		A)	$418,203.13
		B)	$233,956.36
		C)	$238,156.80
		D)	$220,713.55
		E)	$224,354.48


8	Deposits of $700 are made at the beginning of each month for four years to an investment account that earns 6% compounded quarterly. How much interest will be earned during the four years?
		A)	$4268.48
		B)	$4457.82
		C)	$4245.64
		D)	$4433.93
		E)	$3835.25


9	What amount of money is required in a scholarship fund today so that annual scholarship payments of $4000 can be made forever? Assume the fund earns 12% compounded monthly and the first payment is made today.
		A)	$63,079.03
		B)	$37,333.33
		C)	$35,539.52
		D)	$33,333.33
		E)	$31,539.52


10	Marika is saving $50,000 for a down payment for a house over the next six years. In order to reach her goal, she plans to deposit $575.00 at the beginning of each month into a savings account. What quarterly compounded interest rate is she receiving?
		A)	6.04%
		B)	6.20%
		C)	6.15%
		D)	6.23%
		E)	6.07%

2003 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.