R.2 Final Exam Review

Kim and Kanye have been approved for a $400,000 15-year mortgage with an APR of 6.5%. How much of their first monthly payment will go to interest?

• $2,166.67

• $2,546.67

• $1,966.67

• $2,366.67

 $A=P\left(1+\frac{r}{n}\right)^{nt}$  

Larissa deposits $450 into a savings account that earns 3.5% interest compounded quarterly. Using the compound interest formula, what is the balance after 7 years? 

• $574.32

• $475.32

• $521.35

• $695.36

Randy and Sandy each borrowed $13,000 for five years. Randy has a credit score of 650 and has an interest rate of 13.5%, while Sandy has a credit score of 710 and has an interest rate of 6.8%. Using the monthly payment formula, what is the difference between the men’s monthly payments?

• $299.13

• $256.19

• $42.94

• $57.98

An insurance company sells a twenty-year term life insurance policy with a face value of $300,000 to a 45-year old woman. Her annual premium is $1850. If the woman dies after paying premiums for 8 years, what is the insurance company’s gain or loss?

• $285,200

• $14,800

• $1850

• $314,800

Margo wants to take a trip to China in 8 years. She knows she will need about $5,900. Using the formula for present value of a single deposit, how much should she deposit now into an account that pays 4.5% interest compounded daily, in order to meet her goal? Round to the nearest dollar.

• $4,116.38

• $3,125.68

• $4,256.38

• $2,725.36

Rob and Stacy want to save a total of $1,500,000 for retirement. Using the present value of a periodic deposit formula, how much should they deposit monthly into an account that pays 4.9% interest, compounded monthly, to meet their goal in 24 years?

• $2,742.17

• $1,724.17

• $3,742.17

• $3,242.17

The McLemores pay a monthly mortgage payment of $1238. They also pay a semi-annual property tax bill of $4,865 and semi-annual homeowner’s insurance of $1,650. The property tax and insurance are paid monthly into an escrow account to their lender. What is their monthly payment to their lender?

• $1,238

• $2,323.85

• $1,085.85

• $3,232.58

• $1,202.20

• $1,203.22

• $1.02

• $452.23

Mr. Serafin sells textbooks. He receives 4% on his first $5,000 in sales and 15% on the balance of his sales. If his sales in one month were $15,500, what would he earn in commission?

**Find 4% of 5000, then find 15% of the remaining amount (15500-5000=11500) then add those amounts together.

• $1,775

• $1,557

• $1,275

• $1,575

Rochelle receives 42K per year as an assistant fast food manager. Her benefits include $9,250 in health insurance, $1,350 in paid holidays, $6,500 in retirement contributions, $1,540 in paid vacation each year, and $850 in uniforms. What is her annual salary, including benefits?

• $61,490

• $42,000

• $65,790

• $57,490