Quiz

You want to have $30,000 saved 5 years from now to buy a house. How much less do you have to deposit today to reach this goal if you can earn 3.5 percent rather than 2.5 percent on your savings? Today's deposit is the only deposit you will make to this savings account. Group of answer choices $1,219.02 $1,124.60 $891.18 $945.11 $1,256.43

$1,256.43

Today, you have two coins each of which is valued at $100. One coin is expected to appreciate by 5.2 percent annually while the other coin should appreciate by 5.7 percent annually. What will be the difference in the value of the two coins 50 years from now? Group of answer choices $337.43 $380.15 $191.79 $318.04 $128.32

$337.43

At 5 percent interest, how long would it take to triple your money? Group of answer choices 22.52 years 25.64 years 26.55 years 24.87 years 20.01 years

22.52 years

According to the Rule of 72, you can do which one of the following? Group of answer choices Approximately double your money in five years at 7.24 percent interest Approximately double your money in 11 years at 6.55 percent interest Triple your money in 7.2 years at 7.2 percent interest Double your money in 7.2 years at 8 percent interest Approximately triple your money in 7.2 years at 10 percent interest

Approximately double your money in 11 years at 6.55 percent interest

Towne Station is saving money to build a new loading platform. Three years ago, they set aside $23,000 for this purpose. Today, that account is worth $31,406. What rate of interest is Towne Station earning on this investment? Group of answer choices 9.01 percent 8.39 percent 10.94 percent 9.47 percent 8.23 percent

10.94 percent

You will receive $15,000 in two years when you graduate. You plan to invest this at an annual interest rate of 6.5 percent. How much money will you have 8 years from now? Group of answer choices $23,209.19 $19,381.16 $24,824.94 $20,414.73 $21,887.13

$21,887.13

Travis invested $8,000 in an account that pays 4 percent simple interest. How much more could he have earned over a 7-year period if the interest had compounded annually? Group of answer choices $302.16 $287.45 $258.09 $266.67 $291.41

$287.45

Andy deposited $3,000 this morning into an account that pays 5 percent interest, compounded annually. Barb also deposited $3,000 this morning at 5 percent interest, compounded annually. Andy will withdraw his interest earnings and spend it as soon as possible. Barb will reinvest her interest earnings into her account. Given this, which one of the following statements is true? Andy will earn compound interest. Barb will earn more interest in Year 1 than Andy will. Barb will earn more interest in Year 2 than Andy. Andy will earn more interest in Year 3 than Barb will. After five years, Andy and Barb will both have earned the same amount of interest.

Barb will earn more interest in Year 2 than Andy.

This afternoon, you deposited $1,000 into a retirement savings account. The account will compound interest at 6 percent annually. You will not withdraw any principal or interest until you retire in 40 years. Which one of the following statements is correct? The future value of this amount is equal to $1,000 × (1 + 40).06. The present value of this investment is equal to $1,000. The interest amount you earn will double in value every year. The total amount of interest you will earn will equal $1,000 × .06 × 40. The interest you earn in Year 6 will equal the interest you earn in Year 10.

The present value of this investment is equal to $1,000

Your goal is to have $1 million in your retirement savings on the day you retire. To fund this goal, you will make one lump sum deposit today. If you plan to retire ________ rather than ________ and earn a ________ rate of interest, then you can deposit a smaller lump sum today. Group of answer choices today; later; high sooner; later; low later; sooner; low sooner; later; high later; sooner; high

later; sooner; high