KAP Personal Financial Literacy Review (Test 5)

Stephanie deposits $10,000 into each of two savings accounts:

- Account 1 earned 4.8% annual simple interest over a 2 year period

- Account 2 earned 6% annual simple interest over an 3 year period

Stephanie does not make any other deposits or withdrawals. What is the difference in the amount of interest earned between account 1 and account 2 by the end of each period?

• $840

• $860

• $640

• $940

John deposits $14,000 into each of two accounts.

- Account 1 earned 6% interest compounded annually

- Account 2 earned 8% annual simple interest

What is the sum of the balances after 3 years?

• $34,034.22

• $20,034.22

• $46,335.36

• $24,500.75

Two brothers, Marvin and Luis, each invest $5,000 into accounts that earn 5% interest. Neither brother deposits or withdraws anything from the account for 25 years. If Marvin's account earns compound interest and Luis's account earns simple interest, who will earn more interest after 25 years, and by how much?

• Luis will earn $11,250 more in interest than Marvin.

• Marvin will earn $16,931.77 more in interest than Luis.

• Marvin will earn $10,681.77 more in interest than Luis.

• Marvin will earn $5,681.77 more in interest than Luis.

Rosanna needs a loan of $20,000 for a down payment for a home. The loan charges 2.9% simple interest. How much will it cost to repay the loan after 4 years?

• $2,320

• $22,320

• $23,200

• $43,200

Carlos needs to take out a loan for $8,350. His choices are a 5-year loan at 5.3% simple interest and a 7-year loan at 5.5% simple interest. What will be the difference in the amount of interest charged between the 2 loans?

• $1,002

• $10,020

• $102

• $4,520

Angelina has to take out a loan for $18,000. Which option will allow her to pay the least amount of interest?

• A 7-year loan at 5.9% simple interest.

• A 6-year loan at 5.75% simple interest.

• A 5-year loan at 6% simple interest.

• An 8-year loan at 6.2% simple interest.

Erik took out a loan for $8400 for 6 years at a compound interest rate of 5.5%. How much interest does Erik owe from the loan?

• $2,772

• $11,582.28

• $3,182.28

• $108,084.86

Tags

Expressions/Equations

TEKS.MATH.8.12A

• F

• G

• H

• J

• F

• G

• H

• J

• The balance increases by 2% of the sum of $200.00 and $204.00 every year.

• The balance increases by 2% of $200.00 every year.

• The balance increases by 2% of the prior year's ending balance.

• The balance increases by 2% of the sum of the prior year's ending balance and $200.00.