Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
The Basic Tools of Finance 6561
38. You put $150 in the bank two years ago and forgot about it. The bank sends you a notice
that you now have $169.34 in your account. What interest rate did you earn?
a. 5.50 percent
b. 5.65 percent
c. 6.25 percent
d. 7.05 percent
39. Amelia knows that she has about $105 in her bank account. She knows she earned an
interest rate of 4 percent, but she doesn't remember how much she opened the account
with a year ago. How much did she put in?
a. $98.18
b. $100.96
c. $102.04
d. $103.24
6562 The Basic Tools of Finance
40. Tim put $275 in the bank one year ago and forgot about it. Today, the bank sent Tim a
statement indicating that he now has $294.25 in his account. What interest rate did Tim
earn?
a. 5 percent
b. 6 percent
c. 7 percent
d. 8 percent
41. When you were 10 years old, your grandparents put $500 into an account for you paying
7 percent interest. Now that you are 18 years old, your grandparents tell you that you can
take the money out of the account. What is the balance to the nearest cent?
a. $1,200.00
b. $1,111.77
c. $983.58
d. $859.09
The Basic Tools of Finance 6563
42. If you put $125 into an account that paid 3.25 percent interest, then how much money
would you have in the account after 20 years?
a. $285.83
b. $236.98
c. $202.04
d. $145.65
43. If you put $300 into an account paying 2 percent interest, what will be the value of this
account in 4 years?
a. $320.69
b. $324.00
c. $324.73
d. $327.81
6564 The Basic Tools of Finance
44. Two years ago Darryl put $3,000 into an account paying 3 percent interest. How much
does he have in the account today?
a. $3,180.00
b. $3,182.70
c. $3,183.62
d. None of the above are correct to the nearest cent.
45. Three years ago Dawn put $1,200 into an account paying 2 percent interest. How much
is Dawn’s account worth today?
a. $1,225.38
b. $1,248.48
c. $1,264.72
d. $1,273.45
The Basic Tools of Finance 6565
46. Toni deposited $250 into an account and one year later she had $272.50 in the account.
What interest rate was paid on Toni’s deposit?
a. 8 percent
b. 9 percent
c. 10 percent
d. None of the above is correct.
47. Ellen deposited $500 into an account and two years later she had $561.80 in the account.
What interest rate was paid on Ellen’s deposit?
a. 4.88 percent
b. 6.00 percent
c. 12.36 percent
d. None of the above is correct.
6566 The Basic Tools of Finance
48. Bert put $75 into an account and one year later had $100. What interest rate was paid on
Bert’s deposit?
a. 20 percent
b. 25 percent
c. 28 percent
d. None of the above is correct.
49. Susan put $375 into an account and one year later had $405. What interest rate was paid
on Susan’s deposit?
a. 5 percent
b. 7 percent
c. 8 percent
d. 10 percent
The Basic Tools of Finance 6567
50. Hector puts $150 into an account when the interest rate is 4 percent. Later he checks his
balance and finds he has about $168.73. How long did Hector wait to check his balance?
a. 3 years
b. 3.5 years
c. 4 years
d. 4.5 years
51. Marcia has four savings accounts. Which account has the largest balance?
a. $100 deposited 1 year ago at an 8 percent interest rate
b. $100 deposited 2 years ago at a 4 percent interest rate
c. $100 deposited 4 years ago at a 2 percent interest rate
d. $100 deposited 8 years ago at a 1 percent interest rate
6568 The Basic Tools of Finance
52. Clint puts $200 into an account when the interest rate is 8 percent. Later he checks his
balance and finds that he has a balance of about $272.10. How many years did Clint wait
to check his balance?
a. 3 years
b. 3.5 years
c. 4 years
d. 4.5 years
53. Lucretia puts $400 into an account when the interest rate is 10 percent. Later she checks
her balance and finds it's worth about $708.62. How many years did she wait to check
her balance?
a. 5 years
b. 6 years
c. 7 years
d. 8 years
The Basic Tools of Finance 6569
54. Laura says that the present value of $700 to be received one year from today if the
interest rate is 6 percent is less than the present value of $700 to be received two years
from today if the interest rate is 3 percent. Cassie says that $700 saved for one year at 6
percent interest has a smaller future value than $700 saved for two years at 3 percent
interest.
a. Both Laura and Cassie are correct.
b. Both Laura and Cassie are incorrect.
c. Only Laura is correct.
d. Only Cassie is correct.
55. Braden says that $400 saved for one year at 4 percent interest has a smaller future value
than $400 saved for two years at 2 percent interest. Lefty says that the present value of
$400 to be received one year from today if the interest rate is 4 percent exceeds the
present value of $400 to be received two years from today if the interest rate is 2
percent.
a. Braden and Lefty are both correct.
b. Braden and Lefty are both incorrect.
c. Only Braden is correct.
d. Only Lefty is correct.
6570 The Basic Tools of Finance
56. Jarrod says that the future value of $250 saved for one year at 6 percent interest is less
than the future value of $250 saved for two years at 3 percent interest. Simon says that
the present value of a $250 payment to be received in one year when the interest rate is 6
percent is less than the value of a $250 payment to be received in two years when the
interest rate is 3 percent.
a. Jarrod and Simon are both correct.
b. Jarrod and Simon are both incorrect.
c. Only Jarrod is correct.
d. Only Simon is correct.
57. Three people go to the bank to cash in their accounts. Amy had her money in an account
for 25 years at 4 percent interest. Bill had his money in an account for 20 years at 5
percent interest. Celia had her money in an account for 5 years at 20 percent interest. If
each of them originally deposited $500 in their accounts, which of them gets the most
money when they cash in their accounts?
a. Amy
b. Bill
c. Celia
d. They each get the same amount.
The Basic Tools of Finance 6571
58. Veronica deposited $1,000 into an account two years ago. The first year she earned 7
percent interest; the second year she earned 5 percent. How much money does Veronica
have in her account today?
a. $1,133.31
b. $1,120.00
c. $1,123.50
d. None of the above are correct to the nearest cent.
59. Felix deposited $500 into an account two years ago. The first year he earned 3 percent
interest and the second year he earned 5 percent interest. How much money does Felix
have in his account now?
a. $540.75
b. $540.80
c. $540.85
d. None of the above are correct to the nearest cent.
6572 The Basic Tools of Finance
60. Jorge deposited $1,000 into an account three years ago. The first two years he earned 5
percent interest; the third year he earned 6 percent interest. How much money does Jorge
have in his account today?
a. $1,157.90
b. $1,168.65
c. $1,176.00
d. None of the above are correct to the nearest cent.
61. Anna deposited $10,000 into an account three years ago. The first year she earned 12
percent interest, the second year she earned 8 percent interest, and the third year she
earned 4 percent interest. How much money does she have in her account today?
a. $12,579.84
b. $12,596.80
c. $12,597.12
d. None of the above are correct to the nearest cent.
The Basic Tools of Finance 6573
62. Your accountant tells you that if you can continue to earn the current interest rate on
your balance of $750 for the next three years, you will have $944.78 in your account. If
your accountant is correct, then what is the current interest rate?
a. 6 percent
b. 7 percent
c. 8 percent
d. 10 percent
63. Your accountant tells you that if you can continue to earn the current interest rate on
your balance of $800 for the next two years you will have $898.88 in your account. If
your accountant is correct, then what is the current interest rate?
a. 6 percent
b. 7 percent
c. 8 percent
d. 9 percent
6574 The Basic Tools of Finance
64. Your accountant tells you that if you can continue to earn the current interest rate on
your balance of $500 for ten years, you will have about $983.58. If your accountant is
correct, what is the current rate of interest?
a. 5 percent
b. 6 percent
c. 7 percent
d. 8 percent
65. Your financial advisor tells you that if you earn the historical rate of return on a certain
mutual fund, then in three years your $20,000 will grow to $23,152.50. What rate of
interest does your financial advisor expect you to earn?
a. 5 percent
b. 6 percent
c. 7 percent
d. 8 percent
The Basic Tools of Finance 6575
66. Robert put $15,000 into an account with a fixed interest rate two years ago and now the
account balance is $16,917.66. What rate of interest did Robert earn?
a. 4.5 percent
b. 5.4 percent
c. 6.2 percent
d. 8.0 percent
67. The price of a bond is equal to the sum of the present values of its future payments.
Suppose a certain bond pays $50 one year from today and $1,050 two years from today.
What is the price of the bond if the interest rate is 5 percent?
a. $1,050.00
b. $1,045.35
c. $1,000.00
d. $945.35
6576 The Basic Tools of Finance
68. Tonya put $250 into an account three years ago. The first year he earned 6 percent
interest, the second year 7 percent, and the third year 8 percent. About how about much
does Tonya have in her account now?
a. $302.50
b. $306.23
c. $308.67
d. $309.39
69. Imagine that two years ago you inherited $20,000 and put it into an account paying a
fixed 8 percent annual interest rate. How much money do you have in your account now?
a. $22,880.00
b. $23,200.00
c. $23,232.00
d. $23,328.00
The Basic Tools of Finance 6577
70. You are given three options. You may have the balance in an account that has been
collecting 5 percent interest for 20 years, the balance in an account that has been
collecting 10 percent interest for 10 years, or the balance in an account that has been
collecting 20 percent interest for five years. Each account had the same original balance.
Which account now has the lowest balance?
a. the first one
b. the second one
c. the third one
d. They all have the same balance.
71. Daniel has $300 in a bank account. Some years ago he put $213.20 into this account, and
it has earned 5 percent interest every year since then. How many years ago did Daniel
open his account?
a. 4 years
b. 5 years
c. 6 years
d. 7 years
6578 The Basic Tools of Finance
72. When he was 18, Hussam put $100 into an account at an interest rate of 8 percent. He
now has $158.69 in this account. For how many years did Hussam leave this money in
his account?
a. 5 years
b. 6 years
c. 7 years
d. 8 years
73. Four years ago Ollie deposited some money into an account. He earned 5 percent
interest on this account and now it has a balance of $303.88. About how much money did
Ollie deposit into his account when he opened it?
a. $210
b. $220
c. $240
d. $250
The Basic Tools of Finance 6579
74. Two years ago Lenny put some money into an account. He earned 6 percent interest on
this account and now he has about $1,000. About how much did Lenny deposit into his
account two years ago?
a. about $860
b. about $870
c. about $880
d. about $890
75. On May 25, 1980 three pals graduated from high school, pooled together $3,000 and put
the money into an account promising to pay 8% for the next 30 years. On May 25, 2010
they withdrew all the money from the account. To the nearest dollar, how much did they
withdraw?
a. $25,962
b. $27,297
c. $30,188
d. None of the above are correct to the nearest dollar.
6580 The Basic Tools of Finance
76. Zoey wants to have about $750,000 when she retires in 10 years. She has $300,000 to
deposit now. At which of the following interest rates would Zoey’s deposit come closest
to $750,000 after 10 years?
a. 9.6 percent
b. 9.9 percent
c. 10.2 percent
d. 10.5 percent
77. You want to have $100,000 in five years. If the interest rate is 8 percent, about how
much do you need to have today?
a. $66,225.25
b. $67,556.42
c. $68,058.32
d. $71,428.57
