Exam 7: Applications of Percent

What is wrong, if anything, with the statement below? Answer true or false . If false, explain your reasoning. If you owe $370 in February 2005 and pay $300 so that your account is credited in 10 days, the average daily balance (to the nearest cent) is $\frac { ( \$ 370 \times 10 ) + ( \$ 70 \times 18 ) } { 28 } = \$ 177.14$

Estimate the discount for an item marked 20% off with an original price of $1,252.95.

Suppose that an insurance agent offers you a policy that will provide you with a yearly income of $48,000 in 15 years. What is the comparable annual income today, assuming an inflation rate of 2%? $ __________

Use estimation to select the best response. Do not calculate. If you purchase an item for $7,995 at an interest rate of 9.4%, and you finance it for 4 years, then the amount of add-on interest is about: Choose 288, 2,880, or 8,640. $ __________

A car dealer will sell you a $8,121 car for $1,191 down and payments of $198.51 per month for 48 months. What is the total amount paid for both car and financing? Round your answer to the nearest cent.

Fill in the table, assuming simple interest. }">$\text { cellpadding="0" cellspacing="0" width }=" 69 \% \text { " border="1"> }$ I P r t Future Interest Principal Rate Time Value

What is the rule of thumb for determining the monthly payment you can afford?

Most credit cards provide for a minimum finance charge of $70$ cents per month. Suppose that you buy a $39 item, make five monthly payments of $5, and then pay the remaining balance. What are the payments and the total interest for this purchase if the interest rate is 12% but you pay the minimum finance charge? 5 payments of $ __________ plus a last payment of $ __________. Total payments of $ __________ with interest of $ __________.

Karen and Wayne need to buy a refrigerator because theirs just broke. Unfortunately, their savings account is depleted, and they will need to borrow money to buy a new one. The bank offers them a personal loan at 11% (APR), and BigBox offers them an installment loan at 11% (add-on-rate). Suppose that the refrigerator at BigBox costs $1,331 plus 4% sales tax, and Karen and Wayne plan to pay for the refrigerator for 2 years. Should they finance it with the bank or with BigBox? ______________________________ (with the bank / with BigBox / with neither; the interest rate is too high)

Find (period rate), (number of periods), and (future value) for the information given. Fill in the table. cellpadding ="0" cellspacing ="0" width ="95\% " border ="1"> Compounding P r t n i N A Period Present Annual Time Period Number of Future Value Rate Rate Periods Value Annual \ 800 8\% 2 yr ? ? ? ? n = __________ i = __________ % N = __________ A = $ __________

Use estimation to select the best response. If $I = \rho r t$ and $I = \$ 698.05$ , $r = 9.85 \%$ , and $t = 1 \text { year }$ , estimate $P$ . Choose 700, 7,000, 70, or 70,000. $ __________

How much would you have in 5 years if you purchased a $4,000 5-year savings certificate that paid 11% compounded semiannually? $A =$ $ __________

Find the APR (rounded to the nearest percent) for the loan below. Purchased a living room set for $4,000 at 11% add-on interest for 2 years. __________ %

Fill in the table, assuming simple interest. }">$\text { cellpadding }=\text { "0" cellspacing="0" width=" } 69 \% \text { " border="1"> }$ I P r t Future Interest Principal Rate Time Value

Use the table to estimate the monthly payment for the loan. $49,000; 20 years; 7% ">$\text { cellpadding }=0 " \text { cellspacing }=" 0 \text { " align }=\text { "center" width }=" 99 \% \text { " border }=" 1 ">$ $\text { Monthly Cost to Finance } S 1,000$ 5 Years 10 Years 15 Years 20 Years Rate of =60 =120 =180 =240 Interest 6.0\% 19.33 11.10 8.44 7.16 7.0\% 19.80 11.61 8.99 7.75 8.0\% 20.28 12.13 9.56 8.36 9.0\% 20.76 12.67 10.14 9.00 $ __________

Use estimation to select the best response. If a loan is held for 540 days, then t is about __________.

A newspaper advertisement offers a $13,000 car for nothing down and 36 easy monthly payments of $483.67. What is the total amount paid for both car and financing? Round your answer to the nearest dollar. $ __________

Find the discount if the original price is $390 and the percent markdown is 5%.

Suppose you see a car advertised with a price of $32,110 and payments of $622.35 per month for 5 years. What is the total amount of interest paid? Round your answer to the nearest dollar. $ __________

What is the future value of $810 invested at 6% simple interest for 83 days? Assume ordinary interest; that is, use 360 for the number of days in a year.