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©Zarestky Math 141 Quiz 10 Version A 12/1/2009 NAME:________________________________________ 1. (2 points) $1500 is invested in an account paying 6.45% simple interest per year. A. How much is in the account after 8 years? A = P(1 + rt) = 1500(1 + 0.0645·8) = $2274 B. How much interest is earned? Interest = Prt = A – P = 2274 – 1500 = $774 2. (2 points) If an account paying 4% interest compounded annually has a balance of $1900 after 9 years, how much was initially invested in the account? N = 1·9 = 9 I% = 4 PV = ? PMT = 0 FV = 1900 P/Y = 1 C/Y = 1 3. (3 points) You deposit $2700 in a savings account paying 2.8% per year compounded quarterly. After how many years will you have $3100 in the account? N = ? = 19.8048 I% = 2.8 PV = –2700 PMT = 0 FV = 3100 P/Y = 4 C/Y = 4 3. $1334.91 was initially invested. 19.8048/4 = 4.9512 years (3 points) Your credit card has a balance of $800 on which you are paying interest at a rate of 20.5% per year compounded monthly. How much should your payments be if you want to pay off the card in 3 years? N = 12·3 = 36 I% = 20.5 PV = 800 PMT = ? FV = 0 P/Y = 12 C/Y = 12 The payments should be $29.94.