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    Chapter 3 Review Quiz Solutions

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    A. Z
    The document contains solutions to 20 questions about investments and loans. It includes calculations for future and present value, interest, dividends, depreciation, and installment payments. Formulas and step-by-step workings are provided for each question.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Chapter 3 Review Quiz Solutions

    Uploaded by

    A. Z
    343 views4 pages
    The document contains solutions to 20 questions about investments and loans. It includes calculations for future and present value, interest, dividends, depreciation, and installment payments. Formulas and step-by-step workings are provided for each question.

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    Chapter-3-review-quiz-solutions

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    The document contains solutions to 20 questions about investments and loans. It includes calculations for future and present value, interest, dividends, depreciation, and installment payments. Formulas and step-by-step workings are provided for each question.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    343 views4 pages

    Chapter 3 Review Quiz Solutions

    Uploaded by

    A. Z
    The document contains solutions to 20 questions about investments and loans. It includes calculations for future and present value, interest, dividends, depreciation, and installment payments. Formulas and step-by-step workings are provided for each question.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Chapter 3 Investments and loans review quiz solutions

    Question Solution

    FV = PV (1+ r) n
    = $18,000(1+ 0.049)5
    1 = $22,863.88074...
    » $22,863.88
    Future value is $22 863.88
    Lily I = Prn
    = $50,000 ´ 0.03 ´ 4
    = $6,000
    Ryan A = P(1+ r)
    n

    0.03 4´12
    = $50,000(1+ )
    12
    2
    = $56,366.40105...
    » $56,366.40
    I = A- P
    = $56,366 - $50,000
    = $6,366
    Ryan has earned an extra $366.
    12
    æ 0.08 ö
    A = $1600 ´ ç 1+ ÷ I = $2029.19 - $1600
    3 è 4 ø
    = $429.19
    = $2029.19
    A = P(1+ r) n
    = $3500(1+ 0.065)4
    4a = $4502.632227...
    = $4502.63
    Blake has $4502.63 after 4 years.
    I  A P
     4502.63  3500
    4b
     $1002.63
    Blake earns $1002.63 in interest.

    A = P(1+ r) n
    1
    æ 0.039 ö
    = $35,000 ´ ç 1+
    5a è 2 ÷ø
    = $35,682.50
    Balance after 6 months is $35,682.50

    © G K Powers 2018 Published by Cambridge University Press 1


    Chapter 3 Investments and loans review quiz solutions
    A = P(1+ r) n
    20
    æ 0.039 ö
    = $35,000 ´ ç 1+ » $51,500.642
    è 2 ÷ø
    5b
    I = A- P
    = $51,500.64 - $35,000 = $16,500.64
    Interest earned after 10 years is $16,500.64.

    FV = PV (1+ r) n
    1.5´12
    æ 0.048 ö
    = $12,000 ´ ç 1+ ÷
    6 è 12 ø
    = $12,894.01219...
    » $12,894
    2018 to 2029 is 11 years
    FV = PV (1+ r) n
    = $695 ´ (1+ 0.08)11
    7
    = 1620.489103...
    » $1620
    Future value is $1620
    Current value = 3000 ´ $2.25
    8a
    = $6,750
    Annual dividend
    Dividend yield = ´ 100%
    Market price
    $0.07
    8b = ´ 100%
    $2.25
    = 3.111111... » 3%
    Dividend yield is 3%
    Dividend  1500  $0.24
    9a  $360
    Daniel receives a dividend of $360.

    0.24
    Dividend yield = ´100%
    1.80
    9b
    = 13.3333...% » 13.3%
    Dividend yield is 13.3 %

    S = V0 (1- r) n
    = $35,000 ´ (1- 0.15) 4
    10 = $18,270.21875
    » $18,270.22
    Salvage value of the ute is $18,270.22.

    © G K Powers 2018 Published by Cambridge University Press 2


    Chapter 3 Investments and loans review quiz solutions

    S = V0 (1- r) n
    = $83,700 ´ (1- 0.16)4
    = $41,671.83
    11 Depreciation = S - V0
    = $83,700 - $41,671.83
    = $42,028.17
    Depreciation is $42 028.17

    S = V0 (1- r) n
    = $19,990(1- 0.18)3
    12 = $11,021.84632...
    » $11,022
    Salvage value is $11 022

    S = V0 (1- r) n

    13
    = $6200 ´ (1- 0.18)4
    = $2803.15... » $2803
    Salvage value is $2803
    A = P(1+ r) n
    24
    æ 0.06 ö
    = $4800 ç 1+
    è 12 ÷ø
    14
    » $5410.37
    Instalments = $5410.37 ¸ 24
    » $225.43
    Total paid = $485.38×36
    15a = $17 473.68
    Thomas is required to pay back $17 473.68
    Total Interest = $17,473.68 - $14,000
    = $3,473.68
    $3473.68 ¸ 3
    15b Interest rate = ´100
    $14,000
    = 8.2706666... » 8.27%
    Flat rate of interest is 8.27%

    Total paid = $2150×26×7


    16a = $391 300
     Levi is required to pay $391 300 for the loan.

    © G K Powers 2018 Published by Cambridge University Press 3


    Chapter 3 Investments and loans review quiz solutions
    Interest = $391 300 − $246 000
    16b = $145 300
     Interest paid is $145 300

    15.7%
    Daily Interest Rate =
    365
    17a
    = 0.04301369863...
    » 0.0430%

    Interest = $1240 ´ 0.0430% ´12 (12 days)


    = $6.400438356... » $6.40
    17b Total Paid = $1240 + $6.40
    = $1246.40
    Total amount paid is $1246.40

    𝐹𝑉 = 𝑃(1 + 𝑟)𝑛
    0.194 30
    = $7895× (1 + )
    18 365
    = $8021.8624. . .
    ≈ $8021.86
    Jayden owes $8021.86

    𝐹𝑉 = 𝑃𝑉(1 + 𝑟)𝑛
    0.07 15
    = $4300× (1 + )
    100
    = $4345.3719. . .
    19 ≈ $4345.37
    𝐼 =𝐴−𝑃
    = $4345.37 − $4300
    = $45.37
    Interest charged is $45.37

    Costs = $37 + (12×$1.48) + (1×$14)


    20 = $68.76
    Zoe’s banking costs are $68.76

    © G K Powers 2018 Published by Cambridge University Press 4

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