Compare the simple interest and compound interest earned in Exercises 1 and 2. Which earned more? ... 4. $3,600 is deposited in to an account that ear...

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Chapter 10 Review – Pre-AP For Exercises 1–3, use the information provided. 1

1. Jessie deposited $5,000 in to an account that earns 34% simple annual interest. Calculate the interest Jessie will earn after five years. ________________________________________________________________________________ 1

2. Donald deposited $5,000 in to an account that earns 34% compound annual interest. Determine the total account balance after five years. Then determine how much Donald will have earned in interest.

3. Compare the simple interest and compound interest earned in Exercises 1 and 2. Which earned more?

How much more? 1

4. $3,600 is deposited in to an account that earns 42% compound interest annually for 4 years. Calculate the interest earned. Round to the nearest cent. ________________________________________________________________________________________________ 5. Jessie has $2,300 to deposit in an account. She researched several options as shown in the table. Which option would give her the best return on her deposit? Justify your response.

______________________________________________________________

Account

Compound Interest Rate

Number of Years Invested

P

5.5%

5

Q

5.7%

10

R

3 %

1 4

15

______________________________________________________________

6. Martin decided to start saving for his college. He compared two accounts. Account A earns 6.5% annual compound interest and Account B earns 7.3% simple interest. If he plans to deposit $2,350 for 9 years, from which account would he earn more? How much more?

_____________________________________________________________________________________________ _____________________________________________________________________________________________

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NAME _____________________________________________ DATE ____________________________ PERIOD _____________

7. Mary will take out a loan for $3,400 using her credit card. The table gives the monthly payment and interest rates on different tenures of loans. How much more will Mary pay in interest on a 36-month loan than on a 24-month loan?

Loan Term (months)

Annual Interest Rate (%)

Monthly Payment ($)

18

8.25

212.26

24

8.75

154.94

30

9.25

127.38

36

9.75

109.31

_________________________________________________________________________

For Exercise 8, use the data in the table that shows the ages of people in a ceramics class at a community center. 8. What is the mean absolute deviation? Round to the nearest hundredth.

Age of Class Members

__________________________________________________________

Mike is comparing the first-year costs of attending a two-year and a four-year college. The results are shown in the tables.

10

15

19

15

29

25

20

30

Estimated Cost of Attendance (Four-Year College)

Estimated Cost of Attendance (Two-Year College)

Tuition and Fees

$8,100

Tuition and Fees

$6,300

Room & Board

$10,700

Room & Board

$9,500

Books & Supplies

$5,600

Books & Supplies

$3,500

Personal Expenses

$7,900

Personal Expenses

$5,700

9. What is the estimated total cost of attending the two-year college for the first year? _________________________________________ 11. Mike invests $15,000 in a savings account that earns 4.3% annual interest, compounded yearly. What will be the total amount in the account after 7 years?

10. What is the estimated total cost of attending the fouryear college for the first year? _________________________________________ 12. How much more will Mike need to save in order to attend the four-year college for the first year? _________________________________________

_________________________________________

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Course 3 • Chapter 10 Personal Financial Literacy