MAW 11 Chapter 5 - Test Review

What is the interest rate paid on most savings accounts?

• 0% - 2% 
• 6% - 10%
• 15% - 20%
• 20% - 30%

What is the interest rate charged on most bank credit cards?

• 0% - 2%
• 6% - 10%
• 15% - 20%
• 20% - 30%

Which budget item should be considered a variable expense?

• car insurance
• loan payment
• rent
• groceries

What is the future value of $1000 invested at 2% for 3 years with simple interest?

• $60
• $1060
• $600
• $1600

State the value of i (interest rate earned per compounding period) for the following compound interest problem.

$2000 invested at 3% for 4 years with interest compounded semi-annually

• 0.3
• 0.03
• 0.015
• 0.0025

State the value of i (interest rate earned per compounding period) for the following compound interest problem.

$500 invested at 3% for 1 year with interest compounded monthly

• 0.0025
• 0.03
• 0.015
• 0.25

State the value of n (number of compounding periods) for the following compound interest problem.

$2000 invested at 3% for 4 years with interest compounded semi-annually

• 4
• 8
• 2
• 3

State the value of n (number of compounding periods) for the following compound interest problem.

$500 invested at 3% for 1 year with interest compounded monthly

• 3
• 1
• 12
• 24

Use the compound interest formula to determine the future value of the following problem.

$2000 invested at 3% for 4 years with interest compounded semi-annually

• $2533.54
• $2252.99
• $2251.02
• $2122.73

Use the compound interest formula to determine the future value of the following problem.

$500 invested at 3% for 1 year with interest compounded monthly

• $501.25
• $515.00
• $712.88
• $515.21