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1.
Find the effective interest rate of an account that pays 8% interest compounded daily
(365 times each year).
Write your answer as a percent rounded to 2 decimal places, such as 4.13%.
2.
Alice invests $9,000 in an account offering 7.5% interest compounded daily (365 times
per year).
Find the value of the account after 10 years. Round your answer to the nearest cent.
3.
Alice invests $18,000 in an account offering 2.5% interest compounded monthly (12
times per year).
How many years until the account value reaches $20,000? Round your answer to the
nearest year.
4.
Alice invests $18,000 in an account offering 3% interest compounded biannually (2
times per year).
A) Find the value of the account after 8 years. Round your answer to the nearest cent.
B) How many years until the account value reaches $34,000? Round your answer to
the nearest year.
5.
Find the effective interest rate of an account that pays 5% interest compounded
continuously.
Write your answer as a percent rounded to 2 decimal places, such as 4.13%.
6.
Alice invests $5,000 in an account offering 2% interest compounded continuously.
Find the value of the account after 6 years. Round your answer to the nearest cent.
7.
Alice invests $8,000 in an account offering 6% interest compounded continuously.
How many years until the account value reaches $10,000? Round your answer to the
nearest year.
8.
Alice invests $9,000 in an account offering 5.5% interest compounded continuously.
A) Find the value of the account after 5 years. Round your answer to the nearest cent.
B) How many years until the account value reaches $23,000? Round your answer to
the nearest year.
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9.
Determine whether the function models continuous growth or decay.
–1.4
( ) 45 t
Q t e=
A)
Growth
B)
Decay
10.
Find a by converting
k
e
to a.
2.2
55
tt
ea=
Round your answer to 2 decimal places.
11.
Find A) the continuous growth factor and B) the effective growth factor from the
function,
Write your answers as percents rounded to 2 decimal places, like 23.75%.
12.
The deer population in Potter County has a continuous growth rate of 7.6% a year. If
the deer population was 760 in 2007, find a function that gives the deer population, P, as
a function of the years after 2007, y, (Write your answer in
ky
P C e
=
form.)
13.
The deer population in Potter County has a continuous growth rate of 5.7% a year. If
the deer population was 410 in 2007, find:
A) a function that gives the deer population, P, as a function of the years after 2007, y,
(Write your answer in
ky
P C e
=
form.) and,
B) use the function to find the deer population of Potter County in 2016. Round your
answer to the nearest deer.
14.
Find the value of this expression to 4 decimal places.
12
0.025
112

+


15.
If $6,775 is invested at 4.5%, how much more would you have after 19 years if the
interest was compounded continuously compared to compounded monthly?
16.
If $3,571 is invested at 2.9%, how much more would you have after 14 years if the
interest was compounded monthly compared to compounded quarterly?
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17.
If $9,451 is invested at 4.5%, how much more would you have after 18 years if the
interest was compounded continuously compared to compounded quarterly?
18.
Pat recently inherited a large amount of money and wants to put some away for her
child’s college education. Pat figures her daughter will need $28,000 for college at age
18. Her daughter is now 8 years old and Pat can invest the money at 11.1%
compounded annually. How much should Pat invest now to reach her goal? (Round
the answer to the nearest penny.)
19.
Pat recently inherited a large amount of money and wants to put some away for her
child’s college education. Pat figures her daughter will need $40,000 for college at age
18. Her daughter is now 12 years old and Pat can invest the money at 10.3%
compounded Continuously. How much should Pat invest now to reach her goal?
(Round the answer to the nearest penny.)
20.
Determine the doubling time for money invested at 6.7% interest compounded
quarterly. Round the answer to the nearest tenth of a year.
21.
Determine the doubling time for money invested at 5.9% interest compounded
continuously. Round the answer to the nearest tenth of a year.
22.
The city of Carslynn, WI, expects the city budget to double every 34 years. What is the
expected annual percent increase in the budget? Round the answer to the nearest
hundredth of a percent.
23.
The price of a new car increases by 21% every 5 years. What is the annual percent
increase? Round to the nearest hundredth of a percent.
24.
The price of a new car increases by 19% every 6 years. How much would a car that sells
for $24,474 today, sell for in 9 years? Round to the nearest penny.
25.
You have $4,000 to invest for 4 years. Two investment options are presented to you:
I). 5.5% interest compounded monthly, or II). 6.8% interest compounded annually.
A). Which option will give a better return?
B). How much more interest will be earned under this option? (Round the
answer to the nearest penny.)
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26.
A bank compounds interest monthly at 5.1%. Choose the formula that represents the
value of $1600 invested for T years.
A)
4
5.7
6900 1 4
t
V
=  +


B)
0.057
6900 1 4
t
V
=  +


C)
4
0.057
6900 1 4
t
V
=  +


D)
( )
6900 1 0.057 t
V=  +
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Answer Key