advertisement

MATH 1030-008: QUIZ 4 Name: Directions: Please write legibly and circle your final answers. There are problems on both sides of this paper!!!! Remember, you should have the basic compound interest formula memorized! You may need to use one or more of the following formulas: Compound interest formula for interest paid n times a year: AP R nY A=P 1+ n Compound interest formula for continuous compounding: A = P × e(AP R×Y ) Savings plan formula: h 1+ A = PMT × AP R (nY ) n AP R n −1 Loan payment formula: PMT = h AP R n i AP R (−nY ) n P× 1− 1+ Date: Friday, October 26th , 2007. 1 i 1. You need a $165, 000 loan. You choose the 30-year option at AP R = 8.25% from your bank. Calculate your monthly payments and the total loan cost. 2. You have student loans totaling $48, 000 at a fixed APR of 4.5%. After your grace period, you have 25 years to pay the loan off. • Calculate the monthly payment. • Determine the total payment over the term of the loan. • Determine how much of the total payment over the loan term goes to interest. 3. Daisy deposits $1800 in a savings account that compounds interest annually at an APR of 3%. • How much money will she have after 20 years? • How much would she have if her account compounded daily? 4. You put $100 per month in an investment plan that pays an APR of 3.5%. • How much money will you have after 30 years? • Compare this amount to the total deposits made over the time period.