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Compound interest · Chapter 19
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Compound interest · Mock exam

Build confidence in compound growth, APY, present value, and dated deposits. 120 multiple-choice questions: 40 concepts and 80 calculations, with complete worked explanations.
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  • Slater, Ch. 19, pp. 499-502
  • Slater, Ch. 19, pp. 499-503
  • Slater, Ch. 19, pp. 508-511
  • Slater, Ch. 19, pp. 500, 503
  • Slater, Ch. 19, pp. 500-503
  • Slater, Ch. 19, pp. 500
  • Slater, Ch. 19, pp. 503
  • Slater, Ch. 19, pp. 510
  • Slater, Ch. 19, pp. 505
  • Slater, Ch. 19, pp. 506-507
  • Slater, Ch. 19, pp. 502-503
  • Slater, Ch. 19, pp. 509-510
  • Slater, Ch. 19, pp. 510-511
  • Slater, Ch. 19, pp. 502-503, 509
  • Slater, Ch. 19, pp. 500-502
  • Slater, Ch. 19, pp. 501-502
  • Slater, Ch. 19, pp. 504
  • Slater, Ch. 19, pp. 504, 510
  • Slater, Ch. 19, pp. 517, 522
  • Slater, Ch. 19, pp. 499
  • Slater, Ch. 19, pp. 503-511
  • Slater, Ch. 19, pp. 503-507
  • Slater, Ch. 19, pp. 502-503, 509-511
  • Slater, Ch. 19, pp. 503, 517, 522
  • Slater, Ch. 19, pp. 518, 522
  • Slater, Ch. 19, pp. 503, 520
Compound interest · Chapter 19

Exam overview

Answers save as you go.

40concepts
80calculations
Calculation conventions

Use i = r/m and n = mt. Keep full formula precision; round final money to cents and APY to 0.01 percentage point. Periodic-rate questions specify four decimal places. Use supplied table factors exactly. Daily compounding uses 365 periods per year; weekly uses 52. Only stated cash flows occur.

Questions in this exam

Choose instant feedback or see answers after submission.

01What distinguishes compound interest from simple interest?

Concept

  1. It always uses a 360-day year
  2. It is paid only on the original principal
  3. It includes interest earned on prior interest
  4. It ignores the original principal
Slater, Ch. 19, pp. 499-502
02What does future value represent?

Concept

  1. The stated annual percentage alone
  2. The accumulated amount at the end of the investment period
  3. Only the interest from the first period
  4. The original deposit minus interest
Slater, Ch. 19, pp. 499-503
03What does present value represent?

Concept

  1. The future amount plus interest
  2. The amount needed now for a specified future amount
  3. Always the same amount as future value
  4. Only the last year's interest
Slater, Ch. 19, pp. 508-511
04If m is compounding periods per year and t is years, how is n found?

Concept

  1. n = m + t
  2. n = m/t
  3. n = t/m
  4. n = mt
Slater, Ch. 19, pp. 500, 503
05If r is the nominal annual rate, how is periodic rate i found?

Concept

  1. i = r/m
  2. i = m/r
  3. i = rm
  4. i = r + m
Slater, Ch. 19, pp. 500-503
06How many compounding periods occur per year with semiannual compounding?

Concept

  1. 12
  2. 4
  3. 6
  4. 2
Slater, Ch. 19, pp. 500
07How many compounding periods occur per year with quarterly compounding?

Concept

  1. 12
  2. 4
  3. 52
  4. 3
Slater, Ch. 19, pp. 500
08How many compounding periods occur per year with monthly compounding?

Concept

  1. 12
  2. 4
  3. 30
  4. 365
Slater, Ch. 19, pp. 500
09Which formula gives compound future value?

Concept

  1. FV = PV / (1 + i)^n
  2. FV = PV(1 + i)^n
  3. FV = PV(1 + in) for every compound problem
  4. FV = PV + i + n
Slater, Ch. 19, pp. 503
10Which formula gives present value of a lump sum?

Concept

  1. PV = FV / (1 + i)^n
  2. PV = FV(1 + i)^n
  3. PV = FV - i - n
  4. PV = FV / n
Slater, Ch. 19, pp. 510
11How do you calculate total compound interest when PV and FV are known?

Concept

  1. FV + PV
  2. PV - FV for a growing investment
  3. FV - PV
  4. FV / PV
Slater, Ch. 19, pp. 505
12What is the nominal annual rate?

Concept

  1. Always the total return over the entire term
  2. The future value divided by years
  3. Only the monthly rate
  4. The stated annual rate before the effect of within-year compounding
Slater, Ch. 19, pp. 506-507
13What does APY measure in this chapter?

Concept

  1. Only one month's interest
  2. The total return over any number of years
  3. The amount of principal repaid
  4. The effective return over one year including compounding
Slater, Ch. 19, pp. 506-507
14Which expression gives APY for nominal annual rate r and m periods per year?

Concept

  1. APY = r/m
  2. APY = (1 + r/m)^m - 1
  3. APY = (1 + r)^m
  4. APY = rm
Slater, Ch. 19, pp. 506-507
15With a positive nominal rate and annual compounding, how do APY and nominal rate compare?

Concept

  1. APY must be zero
  2. They are equal
  3. APY is always lower
  4. APY is twice the nominal rate
Slater, Ch. 19, pp. 506-507
16With a positive nominal rate and more than one compounding period per year, how does APY compare with that nominal rate?

Concept

  1. APY is higher
  2. APY is unrelated to frequency
  3. APY is always equal
  4. APY is lower
Slater, Ch. 19, pp. 506-507
17At the same positive nominal rate, which schedule gives more growth over the same whole-year term?

Concept

  1. Quarterly rather than monthly compounding
  2. Both always give the same result
  3. Compounding frequency never matters
  4. Monthly rather than quarterly compounding
Slater, Ch. 19, pp. 506-507
18For positive i and n, how large is the future-value factor (1 + i)^n?

Concept

  1. Less than zero
  2. Between zero and 1
  3. Greater than 1
  4. Exactly zero
Slater, Ch. 19, pp. 502-503
19For positive i and n, how large is the present-value factor 1/(1 + i)^n?

Concept

  1. Between zero and 1
  2. Exactly zero
  3. Greater than 1
  4. Less than zero
Slater, Ch. 19, pp. 509-510
20How are FV and PV factors related for the same rate and periods, before rounding?

Concept

  1. They are reciprocals
  2. Their difference is always zero
  3. They are equal
  4. Their sum is always 1
Slater, Ch. 19, pp. 510-511
21Which rate selects the column in a compound-value table?

Concept

  1. The total return over the full term
  2. The principal as a percent
  3. The rate per compounding period
  4. Always the nominal annual rate
Slater, Ch. 19, pp. 502-503, 509
22Which value selects the row in a compound-value table?

Concept

  1. Always the number of years
  2. The annual rate
  3. The total number of compounding periods
  4. The number of calendar days
Slater, Ch. 19, pp. 502-503, 509
23Why can a table-based answer differ slightly from a formula-based answer?

Concept

  1. Table factors are rounded
  2. The two methods always use different principles
  3. The table cannot be used with money
  4. The formula excludes principal
Slater, Ch. 19, pp. 505
24How do you check a present-value answer?

Concept

  1. Use an unrelated rate
  2. Divide it by the future target
  3. Add the number of periods to it
  4. Compound it forward using the same rate and periods
Slater, Ch. 19, pp. 510-511
25At a fixed positive rate, what happens to the PV of a fixed future target when the waiting time increases?

Concept

  1. PV increases
  2. PV is unchanged
  3. PV becomes the target plus interest
  4. PV decreases
Slater, Ch. 19, pp. 508-511
26For a fixed future target and term, what happens to PV if the positive rate rises?

Concept

  1. PV increases
  2. PV stays the same
  3. PV necessarily becomes negative
  4. PV decreases
Slater, Ch. 19, pp. 510-511
27For the same deposit, positive periodic rate, and more than one whole period, how does compound interest compare with simple interest using that periodic rate?

Concept

  1. Compound interest is always zero
  2. Compound interest is greater
  3. Both must be equal
  4. Simple interest is greater
Slater, Ch. 19, pp. 500-502
28With the same principal and periodic rate over exactly one period, how do simple and compound future values compare?

Concept

  1. Compound value is always double
  2. They cannot be calculated
  3. Simple value is always greater
  4. They are equal
Slater, Ch. 19, pp. 501-502
29What is PMT for a single lump-sum TVM problem with no later payments?

Concept

  1. 0
  2. The periodic rate
  3. The initial principal
  4. The future value
Slater, Ch. 19, pp. 504
30In the financial-calculator cash-flow convention, how is an initial deposit typically entered?

Concept

  1. As the interest rate
  2. As the number of periods
  3. As a negative PV
  4. As a positive PV and positive FV simultaneously
Slater, Ch. 19, pp. 504, 510
31Why should stored TVM values be cleared between new problems?

Concept

  1. Clearing guarantees every answer is positive
  2. Clearing changes compound interest into simple interest
  3. Old settings or values can contaminate a new calculation
  4. Clearing eliminates the need for n
Slater, Ch. 19, pp. 504
32What time does a deposit at the beginning of Year 4 correspond to?

Concept

  1. Four completed years after time 0
  2. Three years after time 0
  3. The end of Year 4
  4. One year after time 0
Slater, Ch. 19, pp. 517, 522
33For deposits made at different dates, how do you find one common future balance?

Concept

  1. Use only the last deposit
  2. Give every deposit the longest term
  3. Compound each for its own remaining time, then add
  4. Add the deposits and ignore timing
Slater, Ch. 19, pp. 517, 522
34What error occurs if quarterly compounding uses the full annual rate in every quarter?

Concept

  1. The growth is overstated
  2. The growth is always understated
  3. The correct periodic rate is used
  4. Only the principal changes
Slater, Ch. 19, pp. 500-503
35What error occurs if quarterly compounding uses years for n without multiplying by four?

Concept

  1. Too many compounding periods are used
  2. The period count is correct
  3. Too few compounding periods are used
  4. The rate automatically corrects itself
Slater, Ch. 19, pp. 500-503
36Why does money have time value in the chapter's discussion?

Concept

  1. Money available now can earn interest and avoids waiting risks
  2. A dollar today cannot be invested
  3. Future payments are always more certain
  4. All prices are guaranteed to fall
Slater, Ch. 19, pp. 499
37For a lump sum with zero interest and no other cash flows, what is FV?

Concept

  1. It equals PV
  2. It equals PV divided by n
  3. It is zero
  4. It doubles each year
Slater, Ch. 19, pp. 503
38To compare one-year yields at different compounding frequencies, which measure is most useful?

Concept

  1. The account number
  2. The initial deposit alone
  3. APY under the stated assumptions
  4. Nominal rate alone in every case
Slater, Ch. 19, pp. 506-507
39Why is total compound interest over five years divided by PV not automatically APY?

Concept

  1. That quotient is a five-year return, not a one-year yield
  2. APY is measured only in dollars
  3. It excludes all interest
  4. It is always the nominal rate
Slater, Ch. 19, pp. 506-507
40What does a negative calculated PV normally signify in a TVM calculator using cash-flow signs?

Concept

  1. An instruction to use a negative interest rate
  2. A guaranteed loss of that amount
  3. An amount that must be paid or invested now
  4. A mathematically impossible investment
Slater, Ch. 19, pp. 504, 510
41An investment runs for 7 years and compounds semiannually. Use 2 periods per year. What is n?

Calculation

  1. 16 periods
  2. 7 periods
  3. 3.5 periods
  4. 14 periods
Slater, Ch. 19, pp. 500, 503
42An investment runs for 3.5 years and compounds quarterly. Use 4 periods per year. What is n?

Calculation

  1. 14 periods
  2. 0.875 periods
  3. 3.5 periods
  4. 18 periods
Slater, Ch. 19, pp. 500, 503
43An investment runs for 2.5 years and compounds monthly. Use 12 periods per year. What is n?

Calculation

  1. 0.208333 periods
  2. 42 periods
  3. 30 periods
  4. 2.5 periods
Slater, Ch. 19, pp. 500, 503
44An investment runs for 2 years and compounds weekly. Use 52 periods per year. What is n?

Calculation

  1. 104 periods
  2. 2 periods
  3. 0.0384615 periods
  4. 156 periods
Slater, Ch. 19, pp. 500, 503
45An investment runs for 1 years and compounds daily. Use 365 periods per year. What is n?

Calculation

  1. 1 periods
  2. 730 periods
  3. 0.00273973 periods
  4. 365 periods
Slater, Ch. 19, pp. 500, 503
46A nominal annual rate of 9.00% is compounded semiannually (2 periods per year). What is the periodic rate, rounded to FOUR decimal places as a percentage?

Calculation

  1. 4.5000%
  2. 0.0450%
  3. 18.0000%
  4. 9.0000%
Slater, Ch. 19, pp. 500-503
47A nominal annual rate of 7.00% is compounded quarterly (4 periods per year). What is the periodic rate, rounded to FOUR decimal places as a percentage?

Calculation

  1. 28.0000%
  2. 1.7500%
  3. 7.0000%
  4. 0.0175%
Slater, Ch. 19, pp. 500-503
48A nominal annual rate of 6.60% is compounded monthly (12 periods per year). What is the periodic rate, rounded to FOUR decimal places as a percentage?

Calculation

  1. 79.2000%
  2. 0.5500%
  3. 6.6000%
  4. 0.0055%
Slater, Ch. 19, pp. 500-503
49A nominal annual rate of 5.20% is compounded weekly (52 periods per year). What is the periodic rate, rounded to FOUR decimal places as a percentage?

Calculation

  1. 0.0010%
  2. 0.1000%
  3. 270.4000%
  4. 5.2000%
Slater, Ch. 19, pp. 500-503
50A nominal annual rate of 7.30% is compounded daily (365 periods per year). What is the periodic rate, rounded to FOUR decimal places as a percentage?

Calculation

  1. 0.0002%
  2. 2664.5000%
  3. 7.3000%
  4. 0.0200%
Slater, Ch. 19, pp. 500-503
51$2,500.00 is deposited at a nominal annual rate of 4.50%, compounded annually, for 3 years. What is the future value?

Calculation

  1. $3,052.63
  2. $2,852.92
  3. $352.92
  4. $2,837.50
Slater, Ch. 19, pp. 503-511
52$7,800.00 is deposited at a nominal annual rate of 6.50%, compounded annually, for 5 years. What is the future value?

Calculation

  1. $10,686.68
  2. $11,434.75
  3. $10,335.00
  4. $2,886.68
Slater, Ch. 19, pp. 503-511
53$12,000.00 is deposited at a nominal annual rate of 8.00%, compounded annually, for 7 years. What is the future value?

Calculation

  1. $8,565.89
  2. $22,005.51
  3. $18,720.00
  4. $20,565.89
Slater, Ch. 19, pp. 503-511
54$6,500.00 is deposited at a nominal annual rate of 7.20%, compounded annually, for 4 years. What is the future value?

Calculation

  1. $9,184.95
  2. $2,084.06
  3. $8,372.00
  4. $8,584.06
Slater, Ch. 19, pp. 503-511
55$18,000.00 is deposited at a nominal annual rate of 5.50%, compounded annually, for 6 years. What is the future value?

Calculation

  1. $24,819.17
  2. $23,940.00
  3. $26,556.52
  4. $6,819.17
Slater, Ch. 19, pp. 503-511
56$2,500.00 is deposited at a nominal annual rate of 4.50%, compounded semiannually, for 3 years. What is the future value?

Calculation

  1. $2,672.58
  2. $357.06
  3. $2,857.06
  4. $2,837.50
Slater, Ch. 19, pp. 503-511
57$7,800.00 is deposited at a nominal annual rate of 6.50%, compounded quarterly, for 5 years. What is the future value?

Calculation

  1. $10,335.00
  2. $10,767.27
  3. $8,454.68
  4. $2,967.27
Slater, Ch. 19, pp. 503-511
58$12,000.00 is deposited at a nominal annual rate of 8.00%, compounded monthly, for 7 years. What is the future value?

Calculation

  1. $18,720.00
  2. $8,969.06
  3. $20,969.06
  4. $12,571.33
Slater, Ch. 19, pp. 503-511
59$6,500.00 is deposited at a nominal annual rate of 7.20%, compounded semiannually, for 4 years. What is the future value?

Calculation

  1. $8,625.64
  2. $8,372.00
  3. $7,487.77
  4. $2,125.64
Slater, Ch. 19, pp. 503-511
60$18,000.00 is deposited at a nominal annual rate of 5.50%, compounded quarterly, for 6 years. What is the future value?

Calculation

  1. $6,981.20
  2. $23,940.00
  3. $24,981.20
  4. $19,536.99
Slater, Ch. 19, pp. 503-511
61Find the compound INTEREST earned on $3,900.00 at 4.50% compounded semiannually for 3 years.

Calculation

  1. $4,457.02
  2. $175.50
  3. $557.02
  4. $526.50
Slater, Ch. 19, pp. 503-511
62Find the compound INTEREST earned on $9,200.00 at 6.50% compounded quarterly for 5 years.

Calculation

  1. $598.00
  2. $2,990.00
  3. $3,499.86
  4. $12,699.86
Slater, Ch. 19, pp. 503-511
63Find the compound INTEREST earned on $13,400.00 at 8.00% compounded monthly for 7 years.

Calculation

  1. $7,504.00
  2. $10,015.46
  3. $1,072.00
  4. $23,415.46
Slater, Ch. 19, pp. 503-511
64Find the compound INTEREST earned on $7,900.00 at 7.20% compounded semiannually for 4 years.

Calculation

  1. $2,275.20
  2. $10,483.47
  3. $568.80
  4. $2,583.47
Slater, Ch. 19, pp. 503-511
65Find the compound INTEREST earned on $19,400.00 at 5.50% compounded quarterly for 6 years.

Calculation

  1. $6,402.00
  2. $26,924.18
  3. $1,067.00
  4. $7,524.18
Slater, Ch. 19, pp. 503-511
66A goal requires $10,000.00 exactly 3 years from now. What lump sum must be invested today at 4.50% compounded semiannually?

Calculation

  1. $11,428.25
  2. $8,750.24
  3. $8,810.57
  4. $8,762.97
Slater, Ch. 19, pp. 503-511
67A goal requires $25,000.00 exactly 5 years from now. What lump sum must be invested today at 6.50% compounded quarterly?

Calculation

  1. $18,247.02
  2. $34,510.49
  3. $18,110.43
  4. $18,867.92
Slater, Ch. 19, pp. 503-511
68A goal requires $60,000.00 exactly 7 years from now. What lump sum must be invested today at 8.00% compounded monthly?

Calculation

  1. $104,845.32
  2. $38,461.54
  3. $34,336.30
  4. $35,009.42
Slater, Ch. 19, pp. 503-511
69A goal requires $18,500.00 exactly 4 years from now. What lump sum must be invested today at 7.20% compounded semiannually?

Calculation

  1. $24,549.90
  2. $14,008.53
  3. $14,363.35
  4. $13,940.99
Slater, Ch. 19, pp. 503-511
70A goal requires $90,000.00 exactly 6 years from now. What lump sum must be invested today at 5.50% compounded quarterly?

Calculation

  1. $67,669.17
  2. $65,272.12
  3. $124,906.01
  4. $64,848.76
Slater, Ch. 19, pp. 503-511
71Find the APY for a nominal rate of 4.50% compounded annually. Use 1 periods per year.

Calculation

  1. 4.50%
  2. 9.00%
  3. 4.70%
  4. 4.81%
Slater, Ch. 19, pp. 503-511
72Find the APY for a nominal rate of 6.50% compounded semiannually. Use 2 periods per year.

Calculation

  1. 6.71%
  2. 13.21%
  3. 3.25%
  4. 6.61%
Slater, Ch. 19, pp. 503-511
73Find the APY for a nominal rate of 8.00% compounded quarterly. Use 4 periods per year.

Calculation

  1. 8.24%
  2. 2.00%
  3. 16.49%
  4. 8.16%
Slater, Ch. 19, pp. 503-511
74Find the APY for a nominal rate of 7.20% compounded monthly. Use 12 periods per year.

Calculation

  1. 7.44%
  2. 14.88%
  3. 0.60%
  4. 7.24%
Slater, Ch. 19, pp. 503-511
75Find the APY for a nominal rate of 5.50% compounded daily. Use 365 periods per year.

Calculation

  1. 5.50%
  2. 11.31%
  3. 5.65%
  4. 0.02%
Slater, Ch. 19, pp. 503-511
76Invest $10,000.00 for 4 years. Account A pays 6.00% compounded monthly; account B pays 6.10% compounded annually. Which gives more, and by how much?

Calculation

  1. Account A by $40.00
  2. Account A by $32.41
  3. They are equal at $10,000.00
  4. Account B by $32.41
Slater, Ch. 19, pp. 503-507
77Invest $15,000.00 for 5 years. Account A pays 5.50% compounded monthly; account B pays 5.60% compounded annually. Which gives more, and by how much?

Calculation

  1. Account B by $38.07
  2. Account A by $38.07
  3. They are equal at $15,000.00
  4. Account A by $75.00
Slater, Ch. 19, pp. 503-507
78Invest $8,000.00 for 3 years. Account A pays 7.50% compounded monthly; account B pays 7.60% compounded annually. Which gives more, and by how much?

Calculation

  1. Account A by $45.43
  2. Account A by $24.00
  3. They are equal at $8,000.00
  4. Account B by $45.43
Slater, Ch. 19, pp. 503-507
79Invest $22,000.00 for 6 years. Account A pays 4.80% compounded monthly; account B pays 4.90% compounded annually. Which gives more, and by how much?

Calculation

  1. Account B by $11.77
  2. Account A by $11.77
  3. They are equal at $22,000.00
  4. Account A by $132.00
Slater, Ch. 19, pp. 503-507
80Invest $30,000.00 for 4 years. Account A pays 6.20% compounded monthly; account B pays 6.30% compounded annually. Which gives more, and by how much?

Calculation

  1. Account A by $120.00
  2. They are equal at $30,000.00
  3. Account A by $114.36
  4. Account B by $114.36
Slater, Ch. 19, pp. 503-507
81How much more does $4,000.00 earn at 6.00% compounded annually for 5 years than at the same annual simple-interest rate?

Calculation

  1. $4,152.90
  2. $152.90
  3. $1,200.00
  4. $1,352.90
Slater, Ch. 19, pp. 500-503
82How much more does $8,500.00 earn at 7.00% compounded annually for 4 years than at the same annual simple-interest rate?

Calculation

  1. $2,380.00
  2. $261.77
  3. $2,641.77
  4. $8,761.77
Slater, Ch. 19, pp. 500-503
83How much more does $12,500.00 earn at 4.50% compounded annually for 8 years than at the same annual simple-interest rate?

Calculation

  1. $4,500.00
  2. $776.26
  3. $13,276.26
  4. $5,276.26
Slater, Ch. 19, pp. 500-503
84How much more does $20,000.00 earn at 5.25% compounded annually for 6 years than at the same annual simple-interest rate?

Calculation

  1. $20,887.08
  2. $6,300.00
  3. $887.08
  4. $7,187.08
Slater, Ch. 19, pp. 500-503
85How much more does $6,600.00 earn at 8.00% compounded annually for 3 years than at the same annual simple-interest rate?

Calculation

  1. $130.10
  2. $6,730.10
  3. $1,714.10
  4. $1,584.00
Slater, Ch. 19, pp. 500-503
86For n = 4 and i = 2.00%, the supplied FUTURE-value table factor is 1.0824. Using this factor exactly, find the future value of $3,600.00.

Calculation

  1. $3,888.00
  2. $296.64
  3. $3,896.64
  4. $3,325.94
Slater, Ch. 19, pp. 502-503, 509-511
87For n = 6 and i = 3.00%, the supplied FUTURE-value table factor is 1.1941. Using this factor exactly, find the future value of $7,500.00.

Calculation

  1. $8,955.75
  2. $1,455.75
  3. $6,280.88
  4. $8,850.00
Slater, Ch. 19, pp. 502-503, 509-511
88For n = 8 and i = 4.00%, the supplied FUTURE-value table factor is 1.3686. Using this factor exactly, find the future value of $14,000.00.

Calculation

  1. $18,480.00
  2. $5,160.40
  3. $10,229.43
  4. $19,160.40
Slater, Ch. 19, pp. 502-503, 509-511
89For n = 10 and i = 5.00%, the supplied FUTURE-value table factor is 1.6289. Using this factor exactly, find the future value of $8,200.00.

Calculation

  1. $5,156.98
  2. $5,034.07
  3. $13,356.98
  4. $12,300.00
Slater, Ch. 19, pp. 502-503, 509-511
90For n = 12 and i = 6.00%, the supplied FUTURE-value table factor is 2.0122. Using this factor exactly, find the future value of $26,000.00.

Calculation

  1. $12,921.18
  2. $52,317.20
  3. $44,720.00
  4. $26,317.20
Slater, Ch. 19, pp. 502-503, 509-511
91For n = 4 and i = 2.00%, the supplied PRESENT-value table factor is 0.9238. Using this factor exactly, find the present value of $3,600.00 due at that time.

Calculation

  1. $3,896.95
  2. $3,325.68
  3. $3,333.33
  4. $274.32
Slater, Ch. 19, pp. 502-503, 509-511
92For n = 6 and i = 3.00%, the supplied PRESENT-value table factor is 0.8375. Using this factor exactly, find the present value of $7,500.00 due at that time.

Calculation

  1. $6,281.25
  2. $8,955.22
  3. $6,355.93
  4. $1,218.75
Slater, Ch. 19, pp. 502-503, 509-511
93For n = 8 and i = 4.00%, the supplied PRESENT-value table factor is 0.7307. Using this factor exactly, find the present value of $14,000.00 due at that time.

Calculation

  1. $3,770.20
  2. $10,229.80
  3. $10,606.06
  4. $19,159.71
Slater, Ch. 19, pp. 502-503, 509-511
94For n = 10 and i = 5.00%, the supplied PRESENT-value table factor is 0.6139. Using this factor exactly, find the present value of $8,200.00 due at that time.

Calculation

  1. $5,466.67
  2. $3,166.02
  3. $13,357.22
  4. $5,033.98
Slater, Ch. 19, pp. 502-503, 509-511
95For n = 12 and i = 6.00%, the supplied PRESENT-value table factor is 0.4970. Using this factor exactly, find the present value of $26,000.00 due at that time.

Calculation

  1. $12,922.00
  2. $13,078.00
  3. $15,116.28
  4. $52,313.88
Slater, Ch. 19, pp. 502-503, 509-511
96Deposit $4,000.00 at time 0 and $2,500.00 at the beginning of Year 4 (exactly 3 years later). The account pays 6.00% compounded semiannually. What is the balance at the end of Year 6?

Calculation

  1. $8,203.04
  2. $6,985.13
  3. $8,688.17
  4. $9,267.45
Slater, Ch. 19, pp. 517, 522
97Deposit $6,500.00 at time 0 and $3,200.00 at the beginning of Year 3 (exactly 2 years later). The account pays 5.00% compounded quarterly. What is the balance at the end of Year 7?

Calculation

  1. $13,306.47
  2. $12,403.95
  3. $10,602.52
  4. $13,735.13
Slater, Ch. 19, pp. 517, 522
98Deposit $10,000.00 at time 0 and $6,000.00 at the beginning of Year 2 (exactly 1 years later). The account pays 7.20% compounded monthly. What is the balance at the end of Year 5?

Calculation

  1. $22,908.61
  2. $20,317.88
  3. $22,313.54
  4. $17,995.66
Slater, Ch. 19, pp. 517, 522
99Deposit $18,000.00 at time 0 and $4,500.00 at the beginning of Year 5 (exactly 4 years later). The account pays 4.80% compounded semiannually. What is the balance at the end of Year 8?

Calculation

  1. $31,747.20
  2. $23,440.17
  3. $32,883.79
  4. $30,807.03
Slater, Ch. 19, pp. 517, 522
100Deposit $7,500.00 at time 0 and $2,800.00 at the beginning of Year 4 (exactly 3 years later). The account pays 8.00% compounded quarterly. What is the balance at the end of Year 6?

Calculation

  1. $11,051.08
  2. $14,863.28
  3. $16,566.90
  4. $15,614.36
Slater, Ch. 19, pp. 517, 522
101An initial $10,000.00 earns 5.00% compounded semiannually. Immediately after the interest posting at the end of Year 2, $2,000.00 is withdrawn. What remains at the end of Year 6?

Calculation

  1. $9,038.13
  2. $11,012.08
  3. $10,759.11
  4. $11,448.89
Slater, Ch. 19, pp. 503, 517, 522
102An initial $15,000.00 earns 6.00% compounded quarterly. Immediately after the interest posting at the end of Year 3, $4,500.00 is withdrawn. What remains at the end of Year 5?

Calculation

  1. $15,702.83
  2. $13,434.27
  3. $15,133.61
  4. $14,141.98
Slater, Ch. 19, pp. 503, 517, 522
103An initial $22,000.00 earns 4.80% compounded monthly. Immediately after the interest posting at the end of Year 4, $6,000.00 is withdrawn. What remains at the end of Year 7?

Calculation

  1. $23,837.52
  2. $20,646.54
  3. $22,374.42
  4. $24,764.83
Slater, Ch. 19, pp. 503, 517, 522
104An initial $8,500.00 earns 7.20% compounded quarterly. Immediately after the interest posting at the end of Year 1, $1,500.00 is withdrawn. What remains at the end of Year 4?

Calculation

  1. $9,449.86
  2. $9,312.42
  3. $7,628.72
  4. $9,807.94
Slater, Ch. 19, pp. 503, 517, 522
105An initial $30,000.00 earns 6.50% compounded semiannually. Immediately after the interest posting at the end of Year 5, $8,000.00 is withdrawn. What remains at the end of Year 8?

Calculation

  1. $42,045.18
  2. $33,306.83
  3. $36,699.80
  4. $40,352.80
Slater, Ch. 19, pp. 503, 517, 522
106You invest $6,000.00 today at 6.00% compounded quarterly for 4 years. A purchase will then cost $9,000.00. What is the shortfall at that future date?

Calculation

  1. $1,560.00
  2. $1,386.09
  3. $7,613.91
  4. $3,000.00
Slater, Ch. 19, pp. 518, 522
107You invest $10,000.00 today at 5.20% compounded semiannually for 5 years. A purchase will then cost $15,000.00. What is the shortfall at that future date?

Calculation

  1. $12,926.28
  2. $5,000.00
  3. $2,073.72
  4. $2,400.00
Slater, Ch. 19, pp. 518, 522
108You invest $18,000.00 today at 4.80% compounded monthly for 6 years. A purchase will then cost $26,000.00. What is the shortfall at that future date?

Calculation

  1. $23,993.84
  2. $8,000.00
  3. $2,006.16
  4. $2,816.00
Slater, Ch. 19, pp. 518, 522
109You invest $12,000.00 today at 7.00% compounded quarterly for 3 years. A purchase will then cost $17,000.00. What is the shortfall at that future date?

Calculation

  1. $5,000.00
  2. $2,222.73
  3. $2,480.00
  4. $14,777.27
Slater, Ch. 19, pp. 518, 522
110You invest $25,000.00 today at 5.50% compounded semiannually for 7 years. A purchase will then cost $40,000.00. What is the shortfall at that future date?

Calculation

  1. $15,000.00
  2. $5,375.00
  3. $36,549.85
  4. $3,450.15
Slater, Ch. 19, pp. 518, 522
111$5,000.00 earns 4.00% compounded annually for 2 years. The full balance is then reinvested for 3 additional years at 6.00% compounded semiannually. What is the final amount?

Calculation

  1. $6,083.26
  2. $6,457.43
  3. $6,719.58
  4. $6,308.00
Slater, Ch. 19, pp. 503, 520
112$9,000.00 earns 5.00% compounded annually for 3 years. The full balance is then reinvested for 2 additional years at 4.80% compounded quarterly. What is the final amount?

Calculation

  1. $11,424.91
  2. $11,282.63
  3. $11,486.53
  4. $11,461.84
Slater, Ch. 19, pp. 503, 520
113$16,000.00 earns 6.00% compounded annually for 4 years. The full balance is then reinvested for 2 additional years at 5.50% compounded monthly. What is the final amount?

Calculation

  1. $22,696.31
  2. $21,959.63
  3. $22,238.72
  4. $22,542.74
Slater, Ch. 19, pp. 503, 520
114$24,000.00 earns 4.50% compounded annually for 2 years. The full balance is then reinvested for 4 additional years at 6.20% compounded semiannually. What is the final amount?

Calculation

  1. $31,254.24
  2. $34,619.06
  3. $32,160.60
  4. $33,459.01
Slater, Ch. 19, pp. 503, 520
115$7,200.00 earns 7.20% compounded annually for 3 years. The full balance is then reinvested for 5 additional years at 5.00% compounded quarterly. What is the final amount?

Calculation

  1. $10,669.86
  2. $12,557.14
  3. $10,714.54
  4. $11,371.49
Slater, Ch. 19, pp. 503, 520
116You need $12,000.00 in 5 years at 6.00% compounded semiannually. You already have $4,000.00 available to invest now. What ADDITIONAL deposit today is needed?

Calculation

  1. $8,929.13
  2. $4,929.13
  3. $5,952.75
  4. $8,000.00
Slater, Ch. 19, pp. 510-511
117You need $28,000.00 in 7 years at 5.00% compounded quarterly. You already have $8,000.00 available to invest now. What ADDITIONAL deposit today is needed?

Calculation

  1. $19,774.12
  2. $20,000.00
  3. $14,124.37
  4. $11,774.12
Slater, Ch. 19, pp. 510-511
118You need $50,000.00 in 4 years at 7.50% compounded monthly. You already have $15,000.00 available to invest now. What ADDITIONAL deposit today is needed?

Calculation

  1. $35,000.00
  2. $25,952.86
  3. $37,075.51
  4. $22,075.51
Slater, Ch. 19, pp. 510-511
119You need $16,000.00 in 6 years at 6.40% compounded quarterly. You already have $5,000.00 available to invest now. What ADDITIONAL deposit today is needed?

Calculation

  1. $7,515.25
  2. $11,000.00
  3. $5,931.28
  4. $10,931.28
Slater, Ch. 19, pp. 510-511
120You need $75,000.00 in 8 years at 4.80% compounded semiannually. You already have $22,000.00 available to invest now. What ADDITIONAL deposit today is needed?

Calculation

  1. $36,264.07
  2. $29,317.08
  3. $51,317.08
  4. $53,000.00
Slater, Ch. 19, pp. 510-511

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