MUE Ch 8 Personal Finance

Sarah earns $30 per year on an investment. What is her interest rate if her principal was $1200?

• 0.25%

• 2.5%

• 4%

• 40%

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8.12.D

Reorder the following from most interest earned to least interest earned, if we only find the simple interest.

• $250 principal at 0.2% for 10 years

• $500 principal at 2% for 7 years

• $200 principal at 4% for 15 years

• $400 principal at 0.3% for 12 years

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8.12.D

Maya has $50,000 to invest for retirement. How many years will it take her to have a total of $175,000 in an investment that pays 4% simple interest annually?

Mathematical Equivalence

ON

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8.12.D

An investment of $800 for 4 years earns 3% annual interest. Which will earn more, compound interest or simple interest? By how much?

​ (a)   interest will earn ​ (b)   more than ​ (c)   interest.

• Compound
• Simple
• $96
• $4.41
• $900.41
• $804.41

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8.12.D

Franny plans to invest $2000. How much more would Franny earn by choosing Plan A?

• $115.65

• $121.89

• $147.54

• $171.89

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8.12.D

Maya and Rhea each have $50,000 to invest for retirement. The interest will be compounded annually for 30 years. About how much more money will Rhea have in her account after 30 years?

• $3,389

• $51,522

• $114,489

• $117,878

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8.12.D

Which of the following situations are most likely to consistently increase the return on an investment? Select THREE correct answers.

• Depositing money in a savings account

• Selling stock

• Compounding interest yearly

• Investing in a government bond

• Buying a boat

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8.12.C

Which loan of $212,000 has the least total interest paid over the term of the loan?

• 30 yr loan, interest rate 4.5%

• 25 yr loan, interest rate 5.5%

• 20 yr loan, interest rate 6.5%

• 15 yr loan, interest rate 7%

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8.12.A

8.12.B

Which are examples of earning money? Select TWO answers.

• Paying off a high-interest credit card

• Donating money to a food bank

• Getting interest on money in a savings account

• Buying health insurance

• Charging $1622 for a painting that you created

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8.12.E

8.12.F

Lisa earns $6,150 a month. What is the maximum amount, in dollars, she should spend on rent? She should spend no more than one-third of her earnings on rent.

Mathematical Equivalence

ON

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8.12.E

8.12.F