Question 1

Holly is taking out a loan in the amount of $10,000. Her choices for the loan are a 4-year loan at 4% simple interest and a 6-year loan at 5% simple interest. What is the difference in the amount of interest Holly would have to pay for each of these two loans?

Accepted Answer

$1,400

Answer

$3,000

Answer

$1,600

Answer

$4,600

Question 2

Olivia will deposit $1,530 in an account that earns 6% simple interest every year. Her sister Melinda will deposit $1,500 in an account that earns 8% interest compounded annually. The deposits will be made on the same day, and no additional money will be deposited or withdrawn from the accounts. Which statement about the balances of Olivia’s account and Melinda’s account at the end of 3 years is true?

Accepted Answer

Melinda’s account will have about $84.17 more than Olivia’s account.

Answer

Olivia’s account will have about $84.17 more than Melinda’s account.

Answer

Melinda’s account will have about $5.40 more than Olivia’s account.

Answer

Olivia’s account will have about $5.40 more than Melinda’s account

Question 3

Tuition for one year at a state university is about $13,000. Devon would like to attend this university and will save money each month for the next 4 years. His parents will give him $5,200 for his first year of tuition. Which plan shows the minimum amount of money Devon must save to have enough money to pay for his first year of tuition?

Accepted Answer

Save $162.50 per month for the next 4 years

Answer

Save $108.33 per month for the next 4 years

Answer

Save $270.83 per month for the next 4 years

Answer

Save $650.00 per month for the next 4 years

Question 4

Tamara invested $15,000 in an account that pays 4% annual simple interest. Tamara will not make any additional deposits or withdrawals. How much interest will Tamara earn on her investment at the end of 3 years?

Accepted Answer

$1,800

Answer

$450

Answer

$600

Answer

$1,873

Question 5

Alejandra and her family are discussing how to pay for her college education. The cost of tuition at the college that Alejandra wants to attend is $9,000 per year. Alejandra’s parents will pay 85% of the tuition cost every year, and she will pay the rest. Alejandra has one year to save enough money to attend her first year of college. What is the minimum amount of money she should save every month in order to reach her goal?

Accepted Answer

$112.50

Answer

$1,350.00

Answer

$28.12

Answer

$637.50

Question 6

Nicolas has $650 to deposit into two different savings accounts.
•         Nicolas will deposit $400 into Account I, which earns 3.5% annual simple interest.
• He will deposit $250 into Account II, which earns 3.25 %  interest compounded annually.
Nicolas will not make any additional deposits or withdrawals. Which amount is closest to the total balance of these two accounts at the end of 2 years?

Accepted Answer

$694.51

Answer

$694.25

Answer

$695.00

Answer

$672.13

Question 7

An eighth-grade student estimated that she needs $8,800 for tuition and fees for each year of college. She already has $5,000 in a savings account. The table shows the projected future value of the account in five years based on different monthly deposits. The student wants to have enough money saved in five years to pay the tuition and fees for her first two years of college. Based on the table, what is the minimum amount she should deposit in the savings account every month?

Accepted Answer

$200

Answer

$400

Answer

$100

Answer

$300

Question 8

Mr. Wilkins deposited $2,500 in a new account at his bank.
• The bank pays 6.5% interest compounded annually on this account.
• Mr. Wilkins makes no additional deposits or withdrawals.
Which amount is closest to the balance of the account at the end of 2 years?

Accepted Answer

$2,835.56

Answer

$2,825.00

Answer

$2,513.00

Answer

$2,662.50

Question 9

Clarissa needs a $2,500 loan in order to buy a car. Which loan option would allow her to pay the least amount of interest?

Accepted Answer

An 18-month loan with a 4.75% annual simple interest rate

Answer

A 24-month loan with a 4.25% annual simple interest rate

Answer

A 30-month loan with a 4.00% annual simple interest rate

Answer

A 36-month loan with a 4.50% annual simple interest rate

Question 10

Mr. Flores opened an account with a deposit of $5,000.
• The account earned annual simple interest.
• He did not make any additional deposits or withdrawals.
• At the end of 4 years, the balance of the account was $6,500.
What is the annual interest rate on this account?

Accepted Answer

7.50%

Answer

5.80%

Answer

1.90%

Answer

3.30%

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