Question

1. When their child was born, Elaine and Mike Porter deposited $5,000 in a savings account. The money ears interest at 6 percent compounded quarterly. How much will the account be worth when their child celebrates her second birthday?

My answer= $5,632.46

2. Asia Desai deposited $6,000 in a savings account that pays 5.5% interest compounded daily. How much interest did she earn in 21 days?

My answer= $18.96

3. Lincoln Coo has a check for $667.50 and a check for $126.25. He also has $482.00 in cash. He would lie to receive $25.00 in cash and deposit the rest in his savings account. What is the total deposit?

My answer= $1250.75.

4. Tom Newman took out a simple interest loan of $1,500.00 at 10 percent interest for 12 months. After 4 payments the balance is $1,100.00. He pays off the loan when the next payment is due. What is the interest?

I am not sure of this one.

5. Katherine o donnell obtained a personal loan of $1,800.00 at 10 percent interest for 12 months. the monthly payment is $165.00. what is the new principal after the first payment?

My answer= $1650.00

6. Rishi ram obtained an installment loan for $3,000.00. He agreed to repay the loan in 6 monthly payments. His monthly payments is $516.50. What is the APR?

My answer=6.6%

Am I correct with my answers? Thank you!!

Answer 1

1. P = Po(1+r)^n

Po = $5,000

r = (6%/4)/100 = 0.015 = Quarterly % rate expressed as a decimal.

n = 4comp./yr. * 2yrs. = 8 Compounding
periods.

Solve for P.