Contemporary Business Mathematics for Colleges 17th Edition By Deitz – Test Bank

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Sample Questions Posted Below

 

 

 

 

Objective Short Answer

 

1. Change the percents to decimals or mixed/whole numbers; change the decimals, fractions, or whole numbers to percents.

a. 250% = ______
b. 1 3/4 = ______
c. 0.35 = ______

 

ANSWER:  
a. 2.5 b. 175% c. 35%
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

2. Change the percents to decimals or mixed/whole numbers; change the decimals, fractions, or whole numbers to percents.​

a. 1.7% = ______
b. 7/8 = ______
c. 1.7 = ______

 

ANSWER:  
a. 0.017 b. 87.5% c. 170%
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

3. Change the percents to decimals or mixed/whole numbers; change the decimals, fractions, or whole numbers to percents.​

a. 0.27 = ______
b. 65% = ______
c. 1/2 = ______

 

ANSWER:  
a. 27% b. 0.65 c. 50%
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

4. ​Change the percents to decimals or mixed/whole numbers; change the decimals, fractions, or whole numbers to percents.

a. 0.25% = ______
b. 1/4 = ______
c. 0.125 = ______

 

ANSWER:  
a. 0.0025 b. 25% c. 12.5%
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

5. Solve each of the following problems for the percentage.

a. 120% of $12 = ______
b. 0.02% of 1,600 = ______
c. 40% of $250 = ______

 

ANSWER:  
a. $14.40 b. 0.32 c. $100
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

6. Solve each of the following problems for the percentage.

a. 0.4% of 1520 = ______
b. 6% of 20 = ______
c. 7.5% of $36 = ______

 

ANSWER:  
a. 6.08 b. 1.2 c. $2.70
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

7. ​Solve each of the following problems for the percentage.

a. 37.5% of 1600 = ______
b. 16% of 42.5 = ______
c. 1/4% of $220 = ______

 

ANSWER:  
a. 600 b. 6.8 c. $0.55
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

8. Solve each of the following problems for the percentage.

a. 125% of $42.60 = ______
b. 0.325% of 100 = ______
c. 200% of $2.47 = ______

 

ANSWER:  
a. $53.25 b. 0.325 c. $4.94
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

9. ​Solve each of the following for the base. Round amounts to the nearest two decimal places.

a. 25% of __________ = $4.25
b. 150% of __________ = 1.05
c. 0.375% of __________ = $3.09

 

ANSWER:  
a. $17 b. 0.7 c. $824
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

10. Solve each of the following for the base. Round amounts to the nearest two decimal places.

a. 55% of __________ = 110
b. 1.25% of __________ = $16
c. 120% of __________ = 4.2

 

ANSWER:  
a. 200 b. $1,280 c. 3.5
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

11. ​Solve each of the following for the rate. Round amounts to the nearest two decimal places.

a. ______ of 50 = 200
b. ______ of $316 = $553
c. ______ of 84 = 37.8

 

ANSWER:  
a. 400% b. 175% c. 45%
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

12. Solve each of the following for the rate. Round amounts to the nearest two decimal places.​

a. ______ of $15.50 = $3.72
b. ______ of 0.24 = 0.6
c. ______ of $400 = $10

 

ANSWER:  
a. 24% b. 250% c. 2.5%
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

13. Solve each of the following for the rate. Round amounts to the nearest two decimal places.​

a. ______ of $12.50 = $4.50
b. ______ of 0.35 = 0.7
c. ______ of $750 = $15

 

ANSWER:  
a. 36% b. 200% c. 2%
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

14. ​Solve each of the following for the missing value. Round amounts to the nearest two decimal places.

a. 127% of 460 = __________
b. __________ of $220 = $9.90
c. 33 1/3% of __________ = 117

 

ANSWER:  
a. 584.2 b. 4.5% c. 351
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

15. ​Solve each of the following for the missing value. Round amounts to the nearest two decimal places.

a. 37.5% of 40,000 = __________
b. 1/5% of __________ = $4.80
c. __________ of 2,400 = 18

 

ANSWER:  
a. 15,000 b. $2,400 c. 0.75%
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

16. ​Solve each of the following for the missing value. Round amounts to the nearest two decimal places.

a. 27.5% of 60,000 = __________
b. 1/3% of __________ = $6.40
c. __________ of 6,400 = 16

 

ANSWER:  
a. 16,500 b. $1,920 c. 0.25%
POINTS:   2
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

17. Compute the missing value.​

a. Manufacturing increased from 2,200 packages per day to 2,750 packages per day; the percent increase was __________.
b. Base value = $360; increase = 15%; new (final) value = __________
c. Increasing the base value _________ by 300% gives an increase of 720 units.

 

ANSWER:  
a. 25% b. $414 c. 240 units
POINTS:   2
DIFFICULTY:   Moderate
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

18. Compute the missing value.​

a. An increase by 90 is 15% of the base value ______.
b. Profits were $250,000 in June, but only $220,000 in July. The rate of decrease was ______.
c. Base value = 720; decrease = 25%; new (final) value = ______

 

ANSWER:  
a. 600 b. 12% c. 540
POINTS:   2
DIFFICULTY:   Moderate
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

19. Compute the missing value.​

a. The price decreased from $16.50 to $13.20; the percent decrease was __________.
b. Increasing the base value 217 by 100% yields the new value __________.
c. Decreasing the base value _________ by 75% gives a decrease of 90 units.

 

ANSWER:  
a. 20% b. 434 c. 120
POINTS:   2
DIFFICULTY:   Moderate
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

20. Compute the missing value.

a. 80 homes were sold in April, but only 68 homes were sold in May. The rate of decrease was ______.
b. Start with $120; increase by 50%; end up with ______
c. An increase by $7.50 is 12% of the base value ______.

 

ANSWER:  
a. 15% b. $180 c. $62.50
POINTS:   2
DIFFICULTY:   Moderate
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

21. ​Compute the missing value.

a. 100 cars were sold in October, but only 80 cars were sold in November. The rate of decrease was ______.
b. Start with $115; increase by 40%; end up with ______
c. An increase by $6.40 is 16% of the base value ______.

 

ANSWER:  
a. 20% b. $161 c. $40
POINTS:   2
DIFFICULTY:   Moderate
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

22. ​Nancy saves $120 per week which represents 8% of her total weekly salary. Find her total weekly salary.

ANSWER:   $120 ¸ 0.08 = $1,500
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

23. ​A video store both rents and sells DVD movies and also sells blank DVD disks. During the week between Christmas and New Year, the store had rentals of $4,896, movie sales of $6,513, and blank disk sales of $2,191. What percent of the total revenue was from movie rentals?

ANSWER:   $4,896 + $6,513 + $2,191 = $13,600; $4,896 ¸ $13,600 = 0.36 or 36%

POINTS:   1
DIFFICULTY:   Moderate
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

24. Wanda’s restaurant buys all of its non-food items at a local warehouse store. On a recent trip to the warehouse store, the restaurant owner spent $126.83 just for paper products. If paper products were only 22% of the entire purchase, find the total amount spent on that trip?

ANSWER:   $126.83 ¸ 0.22 = $576.50 total spent on shopping trip
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

25. ​Westside Trailer Rental has 188 trailers available for rent. Last year, it had 160 available for rent. Compute the percent increase in the number of trailers available for rent.

ANSWER:   188 – 160 = 28; 28 ¸ 160 = 0.175 = 17.5%
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

26. Before Christmas, the price of a necktie in a Patrick’s Store for Men was $40. At the post-Christmas sale, the price was $26. By what percent had the price of the necktie been reduced?​

ANSWER:   $40 – $26 = $14; $14 ¸ $40 = 0.35 or 35%
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

27. ​Before Christmas, the price of a shoe in a Heel’s Store for Women was $70. At the post-Christmas sale, the price was $35. By what percent had the price of the shoe been reduced?

ANSWER:   $70 – $35 = $35; $35 ¸ $70 = 0.50 or 50%
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

28. During one work week, Darlene Davies worked a total of 45 hours, 20% of which were weekend hours. Find the number of hours that Darlene worked on the weekend.​

ANSWER:   45 hours ´ 0.2 = 9 hours
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

29. December’s electricity bill of $876.60 represents 22.5% of the total December expenses for Westcamper’s Sheet Metal Fabricating. Compute Westcamper’s total expenses in December.​

ANSWER:   $876.60 ¸ 0.225 = $3,896
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

30. ​During its second year of operation, Juan’s Nursery had a 325% increase in its business revenue. If its revenue in the second year was $2,639,000, what had been its revenue for the first year?

ANSWER:   $2,639,000 ¸ 3.25 = $812,000
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

31. ​Karen Randolph is a marketing manager for a computer software company. When she was promoted, she received a 111% salary increase. The new monthly salary is $5,328. What was Karen’s salary before the promotion?

ANSWER:   $5,328 ¸ 1.11 = $4,800
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

32. ​Sandy Yu earns $4,800 gross pay per month. Last month Sandy received a check for $3,120. What was the percent of her gross salary that had been deducted?

ANSWER:   $4,800 – $3,120 = $1,680; $1,680 ¸ $4,800 = 0.35 = 35%
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

33. Architect Brian Peters spent 60% of a week’s time working on drawings for a new apartment building. If Brian spent 18 hours working on projects other than the apartment building, compute the total hours worked.​

ANSWER:   1.00 – 0.60 = 0.40; 18 hours ¸ 0.40 = 45 hours
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

34. A new route for bicycling to work decreased Herschel’s riding time by 12.5%. If the old route took 32 minutes, how long will the new route take?​

ANSWER:   32 minutes ´ 0.125 = 4 minutes; 32 minutes – 4 minutes = 28 minutes
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

35. A new route for driving to office decreased David’s driving time by 15%. If the old route took 40 minutes, how long will the new route take?​

ANSWER:   40 minutes ´ 0.15 = 6 minutes; 40 minutes – 6 minutes = 34 minutes
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.4
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

36. ​Marie Tavis is an artist. Forty percent Marie’s total sales are to mail order retailers. Last year, Marie’s sales to mail order retailers were $85,000. Determine her total sales last year.

ANSWER:   $85,000 ¸ 0.40 = $212,500
POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

37. R.J. Cassady is an attorney for a bank. Last month, R.J. worked on real estate contracts for 65% of his time. If he worked on real estate contracts for 143 hours, for how long did he work on other projects?​

ANSWER:   143 hours ¸ 0.65 = 220 total hours worked

220 hours – 143 hours = 77 hours on other projects

POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

38. Sunrise Landscape Construction earns 75% of its annual revenue between March and October. If their total annual revenue last year was $1,450,000, how much did they earn either before March or after October?​

ANSWER:   100% – 75% = 25%;

$1,450,000 ´ 0.25 = $362,500 revenue before March or after October

POINTS:   1
DIFFICULTY:   Easy
LEARNING OBJECTIVES:   CBMC.DEIT.5.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

 

 

 

Objective Short Answer

 

Tables 16-1A, 16-1B, 16-2A and 16-2B

 

 

 

 

1. Compute the future value and the compound interest earned for each of the following investments. Use Tables 16-1A&B or a calculator.

Future Compound
Principal Interest Rate Time Value Interest
a. $ 5,500 8% compounded quarterly 3 years __________ _________
b. $10,000 10% compounded annually 15 years __________ _________

 

ANSWER:  
a. 0.08 ¸ 4 = 0.02; 4 ´ 3 = 12; $5,500 ´ 1.26824 = $6,975.32 Future Value
$6,975.32 – $5,500 = $1,475.32 Compound Interest
b. 0.10 ¸ 1 = 0.10; 1 ´ 15 = 15; $10,000 ´ 4.17725 = $41,772.50 Future Value
$41,772.50 – $10,000 = $31,772.50 Compound Interest
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

2. Compute the future value and the compound interest earned for each of the following investments. Use Tables 16-1A&B or a calculator.

 

Future Compound
Principal Interest Rate Time Value Interest
a. $28,000 15% compounded monthly 9 months __________ __________
b. $ 3,760 10% compounded semiannually 10 years __________ __________​

 

ANSWER:  
a. 0.15 ¸ 12 = 0.0125; 9 months; $28,000 ´ 1.11829 = $31,312.12 Future Value
$31,312.12 – $28,000 = $3,312.12 Compound Interest
b. 0.10 ¸ 2 = 0.05; 2 ´ 10 = 20; $3,760 ´ 2.65330 = $9,976.41 Future Value
$9,976.41 – $3,760 = $6,216.41 Compound Interest
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

3. Compute the future value and the compound interest earned for each of the following investments. Use Tables 16-1A&B or a calculator.

 

Future Compound
Principal Interest Rate Time Value Interest
a. $25,000 9% compounded annually 5 years __________ __________
b. $12,880 6% compounded semiannually 8 years __________ __________

 

ANSWER:  
a. 0.09 ¸ 1 = 0.09; 1 ´ 5 = 5; $25,000 ´ 1.53862 = $38,465.50 Future Value
$38,465.50 – $25,000 = $13,465.50 Compound Interest
b. 0.06 ¸ 2 = 0.03; 2 ´ 8 = 16; $12,880 ´ 1.60471 = $20,668.66 Future Value
$20,668.66 – $12,880 = $7,788.66 Compound Interest​
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

4. Compute the future value and the compound interest earned for each of the following investments. Use Tables 16-1A&B or a calculator.

Future Compound
Principal Interest Rate Time Value Interest
a. $12,600 12% compounded quarterly 3 years __________ __________
b. $ 4,800 9% compounded monthly 2/3 year __________ __________

 

ANSWER:  
a. 0.12 ¸ 4 = 0.03; 4 ´ 3 = 12; $12,600 ´ 1.42576 = $17,964.58 Future Value
$17,964.58 – $12,600 = $5,364.58 Compound Interest
b. 0.09 ¸ 12 = 0.0075; 12 ´ 2/3 = 8; $4,800 ´ 1.06160 = $5,095.68 Future Value
$5,095.68 – $4,800 = $295.68 Compound Interest​
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

5. Compute the future value and the compound interest earned for each of the following investments. Use Tables 16-1A&B or a calculator.

​​

Future Compound
Principal Interest Rate Time Value Interest
a. $18,700 6% compounded annually 17 years __________ __________
b. $ 2,400 8% compounded semiannually 13 years __________ __________

 

ANSWER:  
a. 0.06 ¸ 1 = 0.06; 1 ´ 17= 17; $18,700 ´ 2.69277 = $50,354.80 Future Value
$50,354.80 – $18,700 = $31,654.80 Compound Interest
b. 0.08 ¸ 2 = 0.04; 2 ´ 13 = 26; $2,400 ´ 2.77247 = $6,653.93 Future Value
$6,653.93 – $2,400 = $4,253.93 Compound Interest​
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

6. Compute the future value and the compound interest earned for each of the following investments. Use Tables 16-1A&B or a calculator.

Future Compound
Principal Interest Rate Time Value Interest
a. $16,500 5% compounded annually 18 years __________ __________
b. $ 1,600 6% compounded semiannually 14 years __________ __________

 

ANSWER:  
a. 0.05 ¸ 1 = 0.05; 1 ´ 18 = 18; $16,500 ´ 2.40662 = $39,709.23 Future Value
$39,709.23 – $16,500 = $23,209.23 Compound Interest
b. 0.06 ¸ 2 = 0.03; 2 ´ 14 = 28; $1,600 ´ 2.28793 = $3,660.69 Future Value
$3,660.69 – $1,600 = $2,060.69 Compound Interest​
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

7. Compute the future value and the compound interest earned for each of the following investments. Use Tables 16-1A&B or a calculator.

 

Future Compound
Principal Interest Rate Time Value Interest
a. $13,000 12% compounded monthly 2 years __________ __________
b. $ 6,900 6% compounded quarterly 3 years __________ __________

 

ANSWER:  
a. 0.12 ¸ 12 = 0.01; 12 ´ 2 = 24; $13,000 ´ 1.26973 = $16,506.49 Future Value
$16,506.49 – $13,000 = $3,506.49 Compound Interest
b. 0.06 ¸ 4 = 0.015; 4 ´ 3 = 12; $6,900 ´ 1.19562 = $8,249.78 Future Value
$8,249.78 – $6,900 = $1,349.78 Compound Interest​
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

8. Compute the future value for each of the following problems. Use Tables

16-1A&B or a calculator.

a. $4,650 is invested for 9 months at 9% compounded monthly _________
b. $11,570 is loaned for 5 years at 10% compounded annually _________

 

ANSWER:  
a. 0.09 ¸ 12 = 0.0075; 9 months; $4,650 ´ 1.06956 = $4,973.45
b. 0.10 ¸ 1 = 0.10; 1 ´ 5 = 5; $11,570 ´ 1.61051 = $18,633.60​
POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

9. Compute the future value for each of the following problems. Use Tables 16-1A&B or a calculator.

a. $11,000 is deposited for 2 1/2 years at 6% compounded quarterly _________
b. $3,200 is invested for 3 years at 12% compounded semiannually _________

 

ANSWER:  
a. 0.06 ¸ 4 = 0.015; 4 ´ 2 1/2 = 10; $11,000 ´ 1.16054 = $12,765.94
b. 0.12 ¸ 2 = 0.06; 2 ´ 3 = 6; $3,200 ´ 1.41852 = $4,539.26​
POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

10. Compute the future value for each of the following problems. Use Tables 16-1A&B or a calculator.

a. $10,500 is loaned for 4 years at 10% compounded annually __________
b. $7,600 is deposited for 11 years at 6% compounded semiannually __________

 

ANSWER:  
a. 0.10 ¸ 1 = 0.10; 1 ´ 4 = 4; $10,500 ´ 1.46410 = $15,373.05
b. 0.06 ¸ 2 = 0.03; 2 ´ 11 = 22; $7,600 ´ 1.91610 = $14,562.36​
POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

11. Compute the future value for each of the following problems. Use Tables 16-1A&B or a calculator.

a. $8,600 is loaned for 5 years at 12% compounded annually __________
b. $6,400 is deposited for 10 years at 8% compounded semiannually __________

 

ANSWER:  
a. 0.12 ¸ 1 = 0.12; 1 ´ 5 = 5; $8,600 ´ 1.76234 = $15,156.12
b. 0.08 ¸ 2 = 0.04; 2 ´ 10 = 20; $6,400 ´ 2.19112 = $14,023.17​
POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

12. Compute the future value for each of the following problems. Use Tables 16-1A&B or a calculator.​

a. $2,600 is loaned for 1 1/3 years at 15% compounded monthly __________
b. $15,000 is invested for 5 years at 9% compounded quarterly __________

 

ANSWER:  
a. 0.15 ¸ 12 = 0.0125; 12 ´ 1 1/3 = 16; $2,600 ´ 1.21989 = $3,171.71
b. 0.09 ¸ 4 = 0.0075; 4 ´ 5 = 20; $15,000 ´ 1.16118 = $17,417.70
POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

13. University Lending Corp. loans money to students at 10% compounded semiannually. Dwight Burch borrows $5,000 for 4 1/2 years. Compute the total amount, both principal and interest, that Dwight will be required to repay. (Use Tables 16-1A&B or a calculator.)​

ANSWER:   0.10 ¸ 2 = 0.05; 2 ´ 4 1/2 = 9;$5,000 ´ 1.55133 = $7,756.65 total paid​
POINTS:   1
DIFFICULTY:   Easy
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

14. Keifer Air Conditioning can borrow money for 2 years at 12% compounded quarterly. Compute the interest charge if Keifer borrows $28,000 to remodel  its office. (Use Tables 16-1A&B or a calculator.)​

ANSWER:   0.12 ¸ 4 = 0.03; 4 ´ 2 = 8; $28,000 ´ 1.26677 = $35,469.56;$35,469.56 – $28,000 = $7,469.56 interest
POINTS:   1
DIFFICULTY:   Easy
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

15. Marie Chaney borrowed $12,580 from her mother for 4 years at 5% compounded annually. How much interest will Marie have to pay to her mother? (Use Tables 16-1A&B or a calculator.)​

ANSWER:   0.05 ¸ 1 = 0.05; 1 ´ 4 = 4; $12,580 ´ 1.21551 = $15,291.12;

$15,291.12 – $12,580 = $2,711.12 interest​

POINTS:   1
DIFFICULTY:   Easy
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

16. Deborah Erickson deposited $8,875 in a credit union, which pays an interest of 8% compounded quarterly. Compute the amount that Deborah will have in her account after 3 years. (Use Tables 16-1A&B or a calculator.)​

ANSWER:   0.08 ¸ 4 = 0.02; 3 ´ 4 = 12;

$8,875 ´ 1.26824 = $11,255.63 account balance

POINTS:   1
DIFFICULTY:   Easy
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

17. Norah Jacob deposited $6,500 in a credit union, which pays an interest of 6% compounded quarterly. Compute the amount that Norah will have in her account after 4 years. (Use Tables 16-1A&B or a calculator.)​

ANSWER:   0.06 ¸ 4 = 0.015; 4 ´ 4 = 16;

$6,500 ´ 1.26899 = $8,248.44 account balance​

POINTS:   1
DIFFICULTY:   Easy
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

18. Carol Chin received $5,400 as an annual profit-sharing bonus from her employer. Her accountant recommended an investment that would give her a return of 9% compounded annually. Compute the value of Carol’s investment after 7 years. (Use Tables 16-1A&B or a calculator.)​

ANSWER:   0.09 ¸ 1 = 0.09; 1 ´ 7 = 7;

$5,400 ´ 1.82804 = $9,871.42 value after 7 years

POINTS:   1
DIFFICULTY:   Easy
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

19. When his daughter Sarah was born, Will Kravitz deposited $5,000 into an account that guaranteed to pay 8% compounded quarterly. Compute the amount that will be in the account 6 years later when Sarah starts school. (Use Tables 16-1A&B or a calculator.)​

ANSWER:   0.08 ¸ 4 = 0.02; 4 ´ 6 = 24;

$5,000 ´ 1.60844 = $8,042.20 balance after 6 years

POINTS:   1
DIFFICULTY:   Easy
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

20. Tracy Roberts loaned $3,600 to her sister Felicity, who just had a baby. Tracy charged Felicity interest at 6% compounded semiannually. Compute total payment that Tracy will receive from her sister if the loan is for 3 years. (Use Tables 16-1A&B or a calculator.)​

ANSWER:   0.06 ¸ 2 = 0.03; 2 ´ 3 = 6;

$3,600 ´ 1.19405 = $4,298.58 total paid​

POINTS:   1
DIFFICULTY:   Easy
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

21. Winchell Plastics plans to buy a new delivery truck. The company can borrow $16,000 for 15 months at 15% compounded monthly. If Winchell borrows the money at this rate, how much will  it have to pay in interest? (Use Tables 16-1A&B or a calculator.)​

ANSWER:   0.15 ¸ 12 = 0.0125; 15 months; $16,000 ´ 1.20483 = $19,277.28;

$19,277.28 – $16,000 = $3,277.28 interest​

POINTS:   1
DIFFICULTY:   Easy
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.1
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

22. Compute the present value (principal) and the compound interest earned for each of the following investments. Use Tables 16-1A&B or 16-2A&B or a calculator.​

Future Present Compound
Value Interest Rate Time Value Interest
a. $ 6,880 5% compounded quarterly 7 years __________ _________
b. $12,500 5% compounded annually 13 years __________ _________

 

ANSWER:  
a. 0.05 ¸ 4 = 0.0125; 4 ´ 7 = 28; $6,880 ´ 0.70622 = $4,858.79 Present Value
$6,880 – $4,858.79 = $2,021.21 Compound Interest
b. 0.05 ¸ 1 = 0.05; 1 ´ 13 = 13; $12,500 ´ 0.53032 = $6,629.00 Present Value
$12,500 – $6,629.00 = $5,871.00 Compound Interest
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

23. Compute the present value (principal) and the compound interest earned for each of the following investments. Use Tables 16-1A&B or 16-2A&B or a calculator.

​​

Future Present Compound
Value Interest Rate Time Value Interest
a. $25,000 18% compounded monthly 3/4 year __________ _________
b. $ 2,650 6% compounded semiannually 10 years __________ _________

 

ANSWER:  
a. 0.18 ¸ 12 = 0.015; 12 ´ 3/4 = 9; $25,000 ´ 0.87459 = $21,864.75 Present Value
$25,000 – $21,864.75 = $3,135.25 Compound Interest
b. 0.06 ¸ 2 = 0.03; 2 ´ 10 = 20; $2,650 ´ 0.55368 = $1,467.25 Present Value
$2,650 – $1,467.25 = $1,182.75 Compound Interest​
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

24. Compute the present value (principal) and the compound interest earned for each of the following investments. Use Tables 16-1A&B or 16-2A&B or a calculator.​

Future Present Compound
Value Interest Rate Time Value Interest
a. $24,600 6% compounded annually 13 years __________ _________
b. $10,000 10% compounded semiannually 11 years __________ _________

 

ANSWER:  
a. 0.06 ¸ 1 = 0.06; 1 ´ 13 = 13; $24,600 ´ 0.46884 = $11,533.46 Present Value
$24,600 – $11,533.46 = $13,066.54 Compound Interest
b. 0.10 ¸ 2 = 0.05; 2 ´ 11 = 22; $10,000 ´ 0.34185 = $3,418.50
$10,000 – $3,418.50 = $6,581.50​
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

25. Compute the present value (principal) and the compound interest earned for each of the following investments. Use Tables 16-1A&B or 16-2A&B or a calculator.​

Future Present Compound
Value Interest Rate Time Value Interest
a. $25,000 8% compounded annually 14 years __________ _________
b. $12,000 12% compounded semiannually 12 years __________ _________

 

ANSWER:  
a. 0.08 ¸ 1 = 0.08; 1 ´ 14 = 14; $25,000 ´ 0.34046 = $8511.50 Present Value
$25,000 – $8511.50 = $16,488.50 Compound Interest
b. 0.12 ¸ 2 = 0.06; 2 ´ 12 = 24; $12,000 ´ 0.24698= $2963.76
$12,000 – $2963.76= $9,036.24​
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

26. Compute the present value (principal) and the compound interest earned for each of the following investments. Use Tables 16-1A&B or 16-2A&B or a calculator.​

Future Present Compound
Value Interest Rate Time Value Interest
a. $27,000 9% compounded monthly 21 months __________ _________
b. $ 6,280 6% compounded quarterly 7 years __________ _________

 

ANSWER:  
a. 0.09 ¸ 12 = 0.0075; 21 months; $27,000 ´ 0.85478 = $23,079.06 Present Value
$27,000 – $23,079.06 = $3,920.94 Compound Interest
b. 0.06 ¸ 4 = 0.015; 4 ´ 7 = 28; $6,280 ´ 0.65910 = $4,139.15 Present Value
$6,280 – $4,139.15 = $2,140.85 Compound Interest
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

27. Compute the present value (principal) and the compound interest earned for each of the following investments. Use Tables 16-1A&B or 16-2A&B or a calculator.

Future Present Compound
Value Interest Rate Time Value Interest
a. $15,750 8% compounded annually 18 years __________ _________
b. $ 4,280 12% compounded monthly 2 1/2 years __________ _________

 

ANSWER:  
a. 0.08 ¸ 1 = 0.08; 1 ´ 18 = 18; $15,750 ´ 0.25025 = $3,941.44 Present Value
$15,750 – $3,941.44 = $11,808.56 Compound Interest
b. 0.12 ¸ 12 = 0.01; 12 ´ 2 1/2 = 30; $4,280 ´ 0.74192 = $3,175.42 Present Value
$4,280 – $3,175.42 = $1,104.58 Compound Interest​
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

28. Compute the present value (principal) and the compound interest earned for each of the following investments. Use Tables 16-1A&B or 16-2A&B or a calculator.​

Future Present Compound
Value Interest Rate Time Value Interest
a. $ 5,240 8% compounded quarterly 7 years __________ _________
b. $17,000 8% compounded semiannually 13 years __________ _________

 

ANSWER:  
a. 0.08 ¸ 4 = 0.02; 4 ´ 7 = 28; $5,240 ´ 0.57437 = $3,009.70 Present Value
$5,240 – $3,009.70 = $2,230.30 Compound Interest
b. 0.08 ¸ 2 = 0.04; 2 ´ 13 = 26; $17,000 ´ 0.36069 = $6131.73 Present Value
$17,000 – $6,131.73 = $10,868.27 Compound Interest
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

29. Compute the present value (principal) and the compound interest earned for each of the following investments. Use Tables 16-1A&B or 16-2A&B or a calculator.​

Future Present Compound
Value Interest Rate Time Value Interest
a. $ 8,000 12% compounded semiannually 14 years __________ _________
b. $22,800 4% compounded quarterly 6 years __________ _________

 

ANSWER:  
a. 0.12 ¸ 2 = 0.06; 2 ´ 14 = 28; $8,000 ´ 0.19563 = $1,565.04 Present Value
$8,000 – $1,565.04 = $6,434.96 Compound Interest
b. 0.04 ¸ 4 = 0.01; 4 ´ 6 = 24; $22,800 ´ 0.78757 = $17,956.60 Present Value
$22,800 – $17,956.60 = $4,843.40 Compound Interest
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

30. Compute the present value (principal) and the compound interest earned for each of the following investments. Use Tables 16-1A&B or 16-2A&B or a calculator.​

Future Present Compound
Value Interest Rate Time Value Interest
a. $66,000 9% compounded annually 12 years __________ _________
b. $12,500 6% compounded monthly 1.5 years __________ _________

 

ANSWER:  
a. 0.09 ¸ 1 = 0.09; 1 ´ 12 = 12; $66,000 ´ 0.35553 = $23,464.98 Present Value
$66,000 – $23,464.98 = $42,535.02 Compound Interest
b. 0.06 ¸ 12 = 0.005; 12 ´ 1.5 = 18; $12,500 ´ 0.91414 = $11,426.75 Present Value
$12,500 – $11,426.75 = $1,073.25 Compound Interest
POINTS:   2
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

31. Compute the present value in each of the following problems. Use Tables 16-1A&B or 16-2A&B or a calculator.

a. Compute the amount that you must lend today at 10% compounded semiannually to be repaid a total (principal and interest) of $10,000 in 13 years.
b. Compute the amount that you must invest today at 12% compounded annually to have $1,500 in 3 years.

 

ANSWER:  
a. 0.10 ¸ 2 = 0.05; 2 ´ 13 = 26; $10,000 ´ 0.28124 = $2,812.40 lend today
b. 0.12 ¸ 1 = 0.12; 1 ´ 3 = 3; $1,500 ´ 0.71178 = $1,067.67 invest today​
POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

32. Compute the present value in each of the following problems. Use Tables 16-1A&B or 16-2A&B or a calculator.

 

a. How much must you deposit today into an account that pays 12% compounded quarterly to have $9,000 in 3 years?
b. How much must you lend today at 8% compounded semiannually to be repaid a total (principal and interest) of $23,400 in 8 years?

 

ANSWER:  
a. 0.12 ¸ 4 = 0.03; 4 ´ 3 = 12; $9,000 ´ 0.70138 = $6,312.42 deposit today
b. 0.08 ¸ 2 = 0.04; 2 ´ 8 = 16; $23,400 ´ 0.53391 = $12,493.49 lend today​
POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

33. Compute the present value in each of the following problems. Use Tables 16-1A&B or 16-2A&B or a calculator.

a. How much must you invest today at 12% compounded monthly to have $10,000 in 2 years?
b. Compute the amount that you must deposit today into an account that pays 5% compounded quarterly to have $15,000 in 5 years.

 

ANSWER:  
a. 0.12 ¸ 12 = 0.01; 12 ´ 2 = 24; $10,000 ´ 0.78757 = $7,875.70 invest today
b. 0.05 ¸ 4 = 0.0125; 4 ´ 5 = 20; $15,000 ´ 0.78001= $11,700.15 deposit today​
POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

34. Harold Lau will deposit enough money today so that his account will contain $20,000 in 10 years. The account will pay interest at 8% compounded semiannually. Compute the interest (in dollars) that Harold will earn during the 10 years. (Use Tables 16-1A&B or 16-2A&B or a calculator.)​

ANSWER:   0.08 ¸ 2 = 0.04; 2 ´ 10 = 20; $20,000 ´ 0.45639 = $9,127.80;

$20,000 – $9,127.80 = $10,872.20 interest

POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

35. Joseph Patrik will deposit enough money today so that his account will contain $30,000 in 15 years. The account will pay interest at 12% compounded semiannually. Compute the interest (in dollars) that Patrik will earn during the 15 years. (Use Tables 16-1A&B or 16-2A&B or a calculator.)​

ANSWER:   0.12 ¸ 2 = 0.06; 2 ´ 15 = 30; $30,000 ´ 0.17411 = $5,223.30;

$30,000 – $5,223.30= $24,776.70 interest​

POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

36. Beverly Forest is a single parent with twin daughters who are now seniors in high school. Beverly inherited money from her father’s estate and decided that it would be reasonable to save $50,000 of the inheritance for wedding expenses in the event that both daughters should decide to get married in the same year. How much money will Beverly have in 4 years if she can invest the $50,000 and get a return of 8% compounded quarterly? (Use Tables 16-1A&B or 16-2A&B or a calculator.)​

ANSWER:   0.08 ¸ 4 = 0.02; 4 ´ 4 = 16;

$50,000 ´ 1.37279 = $68,639.50 in 4 years​

POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.2
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

37. Newton Kress plans to give his son $12,500 when  his son turns  21, which will be 5 years from now. If Newton finds an investment that will pay 8% compounded semiannually, compute the amount that he must invest today to achieve his goal. (Use Tables 16-1A&B or 16-2A&B or a calculator.)​

ANSWER:   0.08 ¸ 2 = 0.04; 2 ´ 5 = 10;

$12,500 ´ 0.67556 = $8,444.50 invest today​

POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

38. Two-and-one-half years from now, Melanie Olson wants to have $8,500 in the bank. She can earn interest of 12% compounded monthly. Compute the amount that Melanie must deposit today. (Use Tables 16-1A&B or 16-2A&B or a calculator.)​

ANSWER:   0.12 ¸ 12 = 0.01; 12 ´ 2 1/2 = 30;

$8,500 ´ 0.74192 = $6,306.32 deposit today

POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

39. Amanda Nelson wants to buy a new car 3 years from now. In addition to trading in her current car, she estimates that she will need an additional $8,000. Compute the amount that Amanda must invest now if she can earn 5% compounded quarterly. (Use Tables 16-1A&B or 16-2A&B or a calculator.)​

ANSWER:   0.05 ¸ 4 = 0.0125; 4 ´ 3 = 12;

$8,000 ´ 0.86151 = $6,892.08 invest now​

POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

40. James Parker wants to buy a new motorcycle 4 years from now. In addition to trading in his current motorcycle, he estimates that he will need an additional $2,000. Compute the amount that James must invest now if he has to earn 12% compounded quarterly. (Use Tables 16-1A&B or 16-2A&B or a calculator.)​

ANSWER:   0.12 ¸ 4 = 0.03; 4 ´ 4 = 16;

$2,000 ´ 0.62317 = $1,246.34 invest now​

POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

41. Maria Gomez, an attorney, plans to replace all of her office furniture in 5 years. She estimates that the cost will be $17,000 at that time. Compute the amount that Maria should deposit today at 6% compounded annually to have the money available. (Use Tables 16-1A&B or 16-2A&B or a calculator.)​

ANSWER:   0.06 ¸ 1 = 0.06; 1 ´ 5 = 5;

$17,000 ´ 0.74726 = $12,703.42 deposit today

POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

42. When she got married, Lannie Ferguson left all of her personal savings in her own credit union account, which was paying 6% compounded quarterly. Six years later, the same account had increased to $26,871.62. Compute the amount that was in the account when Lannie got married. She made no additional deposits into the account. (Use Tables 16-1A&B or 16-2A&B or a calculator.)​

ANSWER:   0.06 ¸ 4 = 0.015; 4 ´ 6 = 24;

$26,871.62 ´ 0.69954 = $18,797.77 in account​

POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

43. In January, Dana Blakely decided to donate $2,500 to the Riverfront Humane Society. For income tax purposes, she will not make the donation until next December. If Dana can earn 12% compounded monthly, how much must she invest in January to have $2,500 in 11 months? (Use Tables 16-1A&B or 16-2A&B or a calculator.)​

ANSWER:   0.12 ¸ 12 = 0.01; 11 months;

$2,500 ´ 0.89632 = $2,240.80 Invest in January​

POINTS:   1
DIFFICULTY:   Moderate
PREFACE NAME:   Period Table
LEARNING OBJECTIVES:   CBMC.DEIT.16.3
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
KEYWORDS:   Bloom’s: Application

 

 

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