Business Math Chapter 12 Investments

Florence Tyler invests $6,500 in a 4-year certificate of deposit that earns interest at an annual rate of 5 percent compounded daily. The amount per $1.00 is 1.221386. What is the interest earned?

• $23,906.00

• $1,439.01

• $165.28

• $1,896.50

Use Figure 12.1. Janise Smithson can invest $4,000 in a 1-year CD at 3.5 percent compounded daily or a 1-year CD compounded monthly. Determine the amount at maturity of each investment. What is the difference in the amounts?

• $0.56

• $0.34

• $0.65

• $0.78

Christina Stratton invested $8,000 in a certificate of deposit for 4 years. The certificate earns interest at an annual rate of 8.25 percent compounded quarterly. The amount per $1.00 is 1.085088. What is the effective annual yield?

• 3.630%

• 7.032%

• 8.509%

• 2.143%

Use Figure 12.2. Randy Strigle can invest $12,000 at either 6 percent compounded daily for 1 year or 7 percent compounded quarterly for 1 year. Use the figure to calculate the interest. What is the effective annual yield of the better investment?

• 6.183%

• 7.186%

• 5.219%

• 7.192%

Brian Gray buys 1,200 shares of food company stock at $38.20 per share. His online broker charged him $0.03 per share for commission. What is the total cost of the stock?

• $45,876.00

• $45,982.01

• $58,210.98

• $60,129.34

Brett Palmer purchased 3,000 shares of a juice company stock at $50.10 per share. His broker charges $30.50 for fewer than 2,000 shares, or $0.03 per share for 2,000 or more shares. What is the total cost of the stock?

• $45,697.55

• $178,694.00

• $150,390.00

• $160,287.32

Bryant Peters bought 75 shares of Elkston stock for $24.13 per share. The company paid annual dividends of $0.29 per share. What is the total annual dividend?

• $32.10

• $21.99

• $21.75

• $22.00

Neil Rubins owns 200 shares of Cleveland Company stock. The stock ranged from a low of $42.35 to a high of $48.56 last year. The annual dividend is $1.75. What is the annual yield based on the high?

• 3.6%

• 6.9%

• 1.75%

• 2.35%

Otessa Posey bought 2,000 shares of Print Company stock for $12,780. She sold the stock for $7 per share and paid a sales commission of $26. What is the profit or loss from the sale?

• $1,328 loss

• $206 profit

• $1,194 profit

• $1,194 loss

Terell Lewis bought 1,200 shares of International Hotels stock at $31.45 per share. He held the stock for 6 months and sold it at $32.52. Each transaction has a commission of $30 plus $0.02 per share. What is the profit or loss for the sale?

• $3,458 loss

• $2,453 profit

• $3,045 loss

• $1,176 profit