2024 - 1st semester review for Financial Algebra

Front

What is the formula for calculating total fees paid on a checking account?

Back

Total Fees = (Number of Checks x Check Writing Fee) + Monthly Maintenance Fee x Number of Months

Front

How do you calculate the total interest earned on an investment compounded weekly versus annually?

Back

Use the formula A = P(1 + r/n)^(nt) for weekly compounding and A = P(1 + r)^t for annual compounding, where P is principal, r is annual interest rate, n is number of compounding periods per year, and t is time in years.

Front

What is the formula to calculate monthly payments on a loan?

Back

Monthly Payment = [P * (r/n)] / [1 - (1 + r/n)^(-nt)], where P is the loan amount, r is the annual interest rate, n is the number of payments per year, and t is the number of years.

Front

What is simple interest and how is it calculated?

Back

Simple Interest = Principal x Rate x Time, where Principal is the initial amount, Rate is the interest rate per year, and Time is the number of years.

Front

What is the difference between gross pay and net pay?

Back

Gross Pay is the total earnings before deductions, while Net Pay is the amount received after deductions such as taxes and fees.

Front

How do you calculate gross pay for a commission-based job?

Back

Gross Pay = (Base Pay) + (Commission Rate x Number of Sales) for sales above a certain threshold.

Front

What is an APR and how does it affect loan payments?

Back

APR (Annual Percentage Rate) is the annual rate charged for borrowing, which affects the total cost of the loan and the monthly payment amount.

Front

What is the significance of compounding frequency in finance?

Back

Compounding frequency affects the total amount of interest earned or paid; more frequent compounding results in more interest accrued.

Front

How do you determine the total cost of a loan?

Back

Total Cost of Loan = Total Payments - Principal Amount.

Front

What is the relationship between principal, interest rate, and time in financial calculations?

Back

The relationship is defined by the formulas for interest calculations, where increasing any of these factors generally increases the total interest earned or paid.