KAP Personal Financial Literacy Review (Test 5)

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

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.

An employee put $5,000.00 in a retirement account that offers 9% interest compounded annually. The employee makes no additional deposits or withdrawals. Which amount is closest to the interest the employee will have earned at the end of 5 years?

• $229.09

• $450.00

• $2,250.00

• $2,693.12

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

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

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

Mr. Wilkins deposited $2,500.00 into a new account at his bank.

The bank pays 6.5% interest compounded annually on this account.

Mr. Wilkins makes no additional deposits or withdrawals.

Which amount is closest to the balance of the account at the end of 2 years?

• $2,835.56

• $2,513.00

• $2,662.50

• $2,825.00

• F

• G

• H

• J

Andrew will receive an athletic scholarship for $25,000 and his parents will pay $12,000 for his college education. The cost of the school he would like to attend costs $75,600 a year. Andrew is a freshman in high school and has 4 years to save. What is the minimum amount Andrew can save each month to be able to attend his dream school?

• $805

• $755

• $705

• $655

Tuition for one year at a state university is about $13,000. Emmanuel would like to attend this university and will save money each month for the next 4 years. His parents will give him $5,200 for his first year of tuition. Which plan shows the minimum amount of money Emmanuel must save to have enough money to pay for his first year of tuition?

• Save $108.33 per month for the next 4 years

• Save $162.50 per month for the next 4 years

• Save $650.00 per month for the next 4 years

• Save $270.83 per month for the next 4 years