FINANCIAL ALGEBRA TEST 3

James and Terry open a savings account that has a 2.75% annual interest rate, compounded monthly. They deposit $500 into the account each month. How much will be in the account after 20 years?

$159,744.59

Carmencita is 12 years old and she is saving for a car. She wants to have $5000 by the time she is 16 years old. She opens a savings account with an APR of 3.9% compounded weekly. How much should she deposit into her account each week to meet her goal?

$22.22

Margarite wants to take a trip to Japan in 8 years. She knows she will need about $4,200. How much should she deposit into an account now that pays 3.5% interest compounded daily, in order to meet her goal? Round to the nearest dollar.

$3,174

Edward wants to have $50,000 in 10 years for college. What single deposit would he need to make now into an account that pays 4.3% interest compounded daily, to meet his goal?

$32,526.28

Tyrone opens an account at the local bank by depositing $50 of his birthday money. He continues to deposit $50 each month for 5 years. If the account pays 3 1/4% interest compounded monthly how much is in the account after 5 years?

$3252.74

What is the interest earned on $20,000 for five years, at an interest rate of 3 3/5% compounded continuously?

$3944.35

Sonja and Jake just got married. They received $4,500 in gift money and deposited it into a savings account that pays 2.85% simple interest. How much will they have in savings after 3 years?

$4884.75

Houng deposits $2,000 into an account that earns 4.2% interest compounded daily. What is the annual percentage yield (APY) to the nearest hundredth of a percent l?

4.29%

Aaron wants to know how much he needs to save each month in his savings account to have a certain amount in the future. He should use the formula for present value of a periodic deposit investment.

False

Interest compounded semiannually is compounded four times a year.

False

Bob and Kathy want to save a total of $500,000 for retirement. How much should they deposit monthly into an account that pays 3.9% interest, compounded monthly, to meet their goal in 2

$1,051.17

Jackson deposited $5,000 at 3.8% interest, 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?

$11,535.60

LaToya has $113.94 in her checking account. During the week she goes to an ATM and withdraws $40. She is charged a usage fee of $2.50. The following week she deposits her paycheck of $189.73. She writes two checks, one for $22.50 and the other for $70.18. What is the current balance in her checking account?

$168.49

Amy opens a savings account with $ 1,750 she received for graduation. The account pays 4.3% simple interest. What is the balance after 6 months?

$1787.63

Tamika opened a money market account that has a 4.25% annual interest rate, compounded annually. She deposits $1,750 into the account each year. How much interest will the account earn after 15 years?

$33,949.40

Maxine deposited $1,000 into an account that pays 4.5% interest, compounded daily. At the end of six months, she has earned $12 in interest.

False

What does the n variable represent in the formula below

Number of times interest is compounded annually

Malcolm wants to make a deposit into an account that earns interest. He wants to be able to access the money on a limited basis. What type of account should he NOT consider?

Savings account

Annual percent yield is higher than the annual percentage rate because APY takes into account the additional interest earned by compounding

True

Annual percent yield is higher than the annual percentage rate because APY takes into account the additional interest earned by compounding.

True

Conrad savings bank has a $50 overdraft fee. On Friday, Mr.Mcquire deposited his paycheck of $468.92 for a total account balance of $712.34. The next morning, his wife wrote a check for $1267.45 for a new refrigerator and stove. The check cleared the bank by the end of the day. What is the current balance of Mcquires account?

-$605.11

Compound interest earns more than simple interest at the same interest rate because compounding pays interest on the interest earned.

True

The Federal Deposit Insurance Corporation insures bank accounts up to a particular amount. This means that if the bank fails, the money is guaranteed by the government.

True

To reconcile a check register means to match all the entries in the register with the statement received from the bank and correct any discrepancies.

True