Solve the problem Round to the nearest cent as needed 11 Bra

Solve the problem Round to the nearest cent as needed. 11) Brandon\'s savings account has a balance of $4069. After 4 years what will the amount of interest be at 5% compounded quarterly? D) $101.73 A) $899.73 B) $885.73 C) $894.73 Use the future value formula to find the indicated value. Round to three decimal places. 12) n = 14, i-006; PM T-S1; FV.. ? A) $23.276 C) $21.015 D) $37.682 B) $18.882 Find the periodic payment that will render the sum. B) $715.42 13) FV-$29,000, interest is 8% compounded monthly, payments made at the end of each month for 3 years A) $8585.06 C) $2329.33 D) $1528.16 Solve the problem. 14) Sammy borrowed S 10,000 to purchase a new car at an annual interest rate of 11%. She is to pay it back in equal monthly payments over a 5-year period. How much total interest will be paid over the period of the loan? A) $92 Round to the nearest dollar. B) $3045 C) $3630 D) $1435 Formulas APY- er 1

Solution

ANSWER:

11) Present value = $4,069

n = 4 years or 16 quarters

i = 5% per year or 5% / 4 = 1.25% per quarter

fv = pv(f/p,i,n)

fv = 4,069(f/p,1.25%,16)

fv = 4,069 * 1.2199

fv = $4,963.73

12) pmt = $1 , i = 0.06 , n =14

fv = pmt * ( ( 1 + i ) ^ n - 1 ) / i

fv = 1 * ( ( 1 + 0.06) ^ 14 - 1 ) / 0.06

fv = 1 * ( ( 1.06) ^ 14 - 1 ) / 0.06

fv = 1 * ( 2.2609 - 1) / 0.06

fv = 1 * ( 1.2609 ) / 0.06

fv = 1.2609 / 0.06

fv = $21.015

13) fv = $29,000 , i = 8% per year or 8% / 12 or 0.67% per month , n = 3 years or 36 months

pmt = fv(a/f,i,n)

pmt = 29,000(a/f,0.67%,36)

pmt = 29,000 * 0.0247 = $715.42

14) pv = $10,000 , i = 11% per year or 11% / 12 per month , n = 5 years or 60 months

fv = pv(f/p,i,n)

fv = 10,000(f/p,11%/12,60)

fv = 10,000 * 1.7289

fv = 17,289.16

interest paid will be = fv - pv = $17,289.16 - $10,000 = $7,289.16

therefore your options are wrong for question no 14 as the total interest paid is $7,289.16 over the 5 year period.