AMDM Unit 6

A wealthy business woman donates $955,000 to a college to be used as principal for a high school senior scholarship. The principal earns 5.33% interest compounded daily and the interest on the principal becomes the scholarship that is withdrawn from the account once every year in May. What is the dollar (and cent) size of the scholarship?

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Compound Interest: Amount

Ben needs to borrow $3,000 and has found two banks that are willing to offer him a loan.

Regions bank offers 8.7%, compounded daily for 4 years.

Truist bank offers 8.3%, compounded daily for 5 years.

Which option is better for Ben and why? (There is more than one correct answer)

• Regions is the better choice because their loan will be $249.38 cheaper than Truist.

• Truist is the better choice because Ben gets more money ($4,542.90 is better than $4,248.52)

• Regions bank is the better choice for Ben because their loan matures in less time (4 years vs. 5 years)

• Truist bank is the better choice for Ben because they will charge less interest.

Answer explanation

When choosing a bank for your loan, always choose the one that offers you the shortest time period. A shorter time period means that you pay LESS interest.

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Compound Interest: Amount

You have 5 staff people that make salaries of $51,000 per year. Your bus driver and 3 Roadies make $45,000 per year. Your make-up artist, costume designer, electrician and pyro guy each make $60,000 per year. Your profit target is $20,000 per concert and you are planning to sing in 25 concerts this year. The average venue size is 5,000 seats.

What is the minimum price for each ticket?

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Profitability in Business

Match the following

• The highest price (or "high")

• The bottom end of the Japanese candle wick

• The closing price level

• The top end of the Japanese candle wick

• The lowest price (or "low")

• The bottom of a green Japanese candle

• The opening price level

• The top of a green Japanese candle

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Market Trading Basics

Anthony buys a share of stock for $5.27. If he uses a 1:4 Risk/Reward ratio, at what price will he sell the share of stock?

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Market Trading Basics

What does the "Rule of 72" do?

• Estimates the number of years for an investment to double
• Determines the best time to sell an investment
• Predicts the exact value of an investment after a certain period
• Calculates the interest rate needed for an investment to double

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Finance: Intermediate

You and your spouse just had a baby and you both want to give your child a $5000 high school graduation gift. You plan to use a bank that offers 4.3% interest compounded daily. How much will you have to deposit so your principal will fully mature on time?

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Compound Interest: Principle

What interest rate will you need to make $4,457 grow into $6,500 if the interest is compounded daily for 8 years?

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Compound Interest: Interest Rate

Assuming that you make NO monthly contributions to an account that yields 5.7 % interest compounded daily, how long will it take your deposit of $1000 to mature into $1,200?

Answer: It will take (a)   years, ​ (b)   weeks, ​ (c)   days, ​ (d)   hours and ​ (e)   minutes

• 1
• 2
• 3
• 10
• 9
• 21
• 5
• 12
• 6
• 7

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Compound Interest: Time

Your parents tell you that you have to move out of their house in 12 weeks. You have calculated that it will cost you $3,400 to move out and have enough money left over to pay your first month's bills. How much will you have to save up each week so you can move out on time?

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Move Out: Amount