Question 232743: I am currently without a book and some of these are still questionable to me. Anyone disagree? I makred my answers with the x. I have seen a similar test but nothing was solved that I found
1. The terms of a loan indicate how often interest is compounded. (Points: 2)
xTrue
False
2. A compound interest table shows the compounded amount per dollar of principal. (Points: 2)
True
xFalse
3. To compound daily means to compound 360 times a year. (Points: 2)
True
xFalse
4. The number of compounding periods for $6,600.00 at 12% compounded quarterly for 15 years is 30 periods. (Points: 2)
True
xFalse
5. The effective rate of a transaction can be calculated by dividing the interest for one year by the principal. (Points: 2)
xTrue
False
6. The term "nominal rate" means the same as "true rate." (Points: 2)
True
xFalse
7. The interest on $4,200.00 at 8% compounded semiannually for 10 years is $6,292.40. (Points: 2)
True
xFalse
8. The effective rate is: (Points: 2)
the stated rate
the nominal rate
the true semiannual rate
the true annual rate
x none of the above
9. $15,000.00 for 10 years compounded at 10% quarterly results in how many periods? (Points: 2)
120
20
10
x40
none of the above
10. In a loan of 8% compounded quarterly, what is the periodic interest (Points: 2)
x 2.5%
6%
2%
4%
11. $25,000.00 for 15 years compounded at 10% quarterly results in a periodic interest rate of: (Points: 2)
10%
x7%
5%
2.5%
none of the above
12. The effective rate is: (Points: 2)
xthe interest for one year divided by the principal
the interest for one year divided by the principal for three years
the interest for one year divided by the annual rate
never related to the compound table
none of the above
13. Josh is having difficulty deciding whether to put his savings in the Mercantile Bank or the Boatmen's Bank. Mercantile offers a 10% rate compounded quarterly while Boatmen's offers 12% compounded semiannually. Josh has $40,000.00 to invest and expects to withdraw the money at the end of 5 years. (Use Table 10-1 from the textbook.) The best deal is: (Points: 2)
xMercantile Bank
Mercantile Bank for the last two years
Boatmen's Bank for the first two years
Boatmen's Bank
none of the above
14. Don deposited $27,500.00 in Trader's Bank at an interest rate of 12% compounded quarterly. (Use Table 10-1 from the textbook.) The effective rate was: (Points: 2)
12.55%
12%
x13%
14.0%
none of the above
15. Lisa wants to attend the University of Colorado. She will need to have $80,000.00 five years from today. Lisa is wondering what she will have to put in the bank today so she will have $80,000.00 in five years. Her bank pays 10% compounded quarterly. By using Table 10-3 in the textbook, the amount Lisa will need to deposit is: (Points: 2)
$48,281.68
$49,113.60
$48,821.60
x$49,113.06
none of the above
Answer by solver91311(24713)   (Show Source):
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