13-4_Modeling Interest Compounded More Than Once a Year

Monthly means how many times a year? [mark:1]

• 2

• 4

• 12

• 365

Quarterly means how many times a year? [mark:1]

• 2

• 4

• 12

• 365

Daily means how many times a year? [mark:1]

• 2

• 4

• 12

• 365

Semi-annually means how many times a year? [mark:1]

• 2

• 4

• 12

• 365

The present value is $1800. Interest is compounded quarterly at a rate of 12%. How many years does it take for a future value of $3200? [mark:2]

• approximately 5.66 years

• approximately 4.88 years

• approximately 3.32 years

• approximately 1.02 years

The present value is $1200. Interest is compounded monthly at a rate of 8%. How many years does it take for a future value of $2000? [mark:2]

• approximately 12 years

• approximately 37 years

• approximately 74 years

• approximately 6 years

You are about to invest money in a bank that pays an annual interest rate of 10% compounded semi-annually. How many years do you expect your money to "double"?[mark:2]

• approximately 7.10 years

• approximately 14.6 years

• approximately 3.02 years

• approximately 30.3 years

BONUS:

You are about to invest money in a bank that pays an annual interest rate of 10%. If you are expecting to double your money, which compounded period will give you a shorter time?"?[mark:2]

• semi-annually

• annually