## Mathematical Applications For The Management Life And Social Sciences 11th Edition by Harshbarger – Test Bank

1. Find I: .

a. $1,026

b. $1,197

c. $855

d. $342

e. $1,140

ANSWER: a

2. What does the number 260 represent in the given equation: ?

a. principal

b. interest

c. future value

d. time

e. annual interest rate

ANSWER: b

3. What does the number 0.06 represent in the given equation: .

a. annual interest rate

b. interest

c. future value

d. time

e. principal

ANSWER: a

4. $3,000 is invested for 15 months at an annual simple interest rate of 12%. How much interest will be earned? Round your answer to the nearest dollar.

a. $4,503

b. $5,400

c. $450

d. $397

e. $543

ANSWER: c

5. If you borrow $1,400 for 6 years at 7% annual simple interest, how much must you repay at the end of the 3 years? Round your answer to the nearest dollar.

a. $2,114

b. $7,280

c. $1,890

d. $2,086

e. $1,988

ANSWER: e

6. If you lend $3,500 to a friend for 19 months at 8% annual simple interest, find the future value of loan. Round your answer to the nearest cent.

a. $4,386.67

b. $8,820.00

c. $3,998.75

d. $3,943.33

e. $3,887.92

ANSWER: d

7. Jenny Reed bought SSX stock for $15 per share. The annual dividend was $1.50 per share, and after 2 year(s), SSX was selling for $38 per share. Find the simple interest rate of growth of her money to the nearest hundredth of a percent. Round your answer to two decimal places.

a. 8.67%

b. 76.67%

c. 34.21%

d. 86.67%

e. 186.67%

ANSWER: d

8. Suppose that in order to buy a Treasury bill (T-bill) that matures to $10,000 in 10 months, you must pay $9,750. What rate does this earn? Round your answer to one decimal place.

a. 4.3%

b. 1.8%

c. 3.7%

d. 2.5%

e. 3.1%

ANSWER: e

9. A student has a savings account earning 8% simple interest. She must pay $1,400 for first-semester tuition by September 1 and $1,400 for second-semester tuition by January 1. How much must she earn in the summer (by September 1) in order to pay the first-semester bill on time and still have the remainder of her summer earnings grow to $1,400 between September 1 and January 1? Round your answer to two decimal places.

a. $2,781.58

b. $2,772.55

c. $2,763.64

d. $2,746.15

e. $2,784.18

ANSWER: c

10. What is the present value of an investment at 15% annual simple interest if it is worth $924.50 in 6 months? Round your answer to the nearest cent.

a. $860.00

b. $870.00

c. $850.00

d. $914.50

e. $934.50

ANSWER: a

11. How long does it take for $6,000 invested at 9% annual simple interest to be worth $10,500? Round your answer to two decimal places.

a. 30.56 years

b. 83.33 years

c. 8.33 years

d. 4.76 years

e. 0.83 years

ANSWER: c

12. An investor owns several apartment buildings. The taxes on these buildings total $2,000 per year and are due before April 1. The late fee is 0.5% per month up to 6 months, at which time the buildings are seized by the authorities and sold for back taxes. If the investor has $2,000 available on March 31, how much money will he save by investing the money at 9% and paying the taxes and the penalty on September 30 instead of paying the taxes at that time? Round your answer to the nearest cent.

a. $120.00

b. $84.00

c. $30.00

d. $75.00

e. $48.00

ANSWER: c

13. Andre De Quadros bought a $2,000, 9-month certificate of deposit (CD) that would earn 8.5% annual simple interest. What is the value of the CD when it matures? Round your answer to to the nearest cent.

a. $2,042.50

b. $2,085.00

c. $2,170.00

d. $2,113.33

e. $2,127.50

ANSWER: e

14. Leah Hagel bought a $4,000, 9-month certificate of deposit (CD) that would earn 7% annual simple interest. Three months before the CD was due to mature, Leah needed her CD money, so a friend agreed to lend her money and receive the value of the CD when it matured. If their agreement allowed the friend to earn a 11% annual simple interest return on her loan to Leah, how much did Leah receive from her friend? Round your answer to the nearest cent.

a. $4,325.78

b. $4,061.09

c. $3,990.52

d. $4,171.76

e. $3,922.36

ANSWER: a

15. What is the fifth term of the sequence whose nth term is ?

a.

b.

c.

d.

e.

ANSWER: a

16. Write the fourth term of the sequence whose nth term is ?

a.

b.

c.

d.

e.

ANSWER: a

17. What are d and a1 in the following arithmetic sequence?

5, 10, 15,…

a.

b.

c.

d.

e.

ANSWER: d

18. What are the next three terms in the arithmetic sequence 7, 0, –7,…?

a. –14, –21, –28

b. 14, 21, 28

c. –7, –14, –21

d. –7, 21, –28

e. 7, 14, 28

ANSWER: a

19. Find the 41th term of the arithmetic sequence with first term and common difference .

a.

b.

c.

d.

e.

ANSWER: d

20. Find the 63th term of the arithmetic sequence with first term 25 and tenth term 61.

a. 285

b. 281

c. 269

d. 277

e. 273

ANSWER: e

21. Find the sum of the first 62 terms of the arithmetic sequence with first term 9 and 62th term 229.

a. 7,378

b. 7,735

c. 7,140

d. 8,568

e. 6,545

ANSWER: a

22. Find the sum of the first 208 terms of the arithmetic sequence 12, 10, 8,…

a. –39,520

b. –42,640

c. –40,560

d. –37,440

e. –44,720

ANSWER: c

23. Suppose you are offered a job paying a starting salary of $23,000 with yearly raises of $1,300. How much will you receive for your 10th year on the job?

a. $37,300

b. $34,700

c. $32,100

d. $36,000

e. $36,000

ANSWER: b

24. A new firm loses $1,600 in its first month, but its profit increases by $400 in each succeeding month for the rest of its first year. What is its profit in the twelfth month?

a. $6,800

b. $2,800

c. $3,200

d. $6,000

e. $4,400

ANSWER: b

25. Suppose an employee has a base salary of $23,000 per year and at the end of each year a raise of $1,000 will be given. Find the employee’s total income after the first 3 years.

a. $144,000

b. $72,000

c. $73,500

d. $37,500

e. $24,000

ANSWER: b

26. Find S: . Round your answer to the nearest cent.

a. $7,394.15

b. $1,173.17

c. $4,730.70

d. $3,000.00

e. $1,885.04

ANSWER: c

27. What does the number 0.004 represent in the given equation: ?

a. number of periods

b. future value

c. principal value

d. periodic rate

e. none of these choices

ANSWER: d

28. What interest will be earned if $5,800 is invested for 2 years at an annual rate of 9% compounded monthly? Round your answer to the nearest cent.

a. $7,586.35

b. $6,635.80

c. $7,191.44

d. $6,939.20

e. $45,884.28

ANSWER: d

29. Find the future value if $4200 is invested for 2 years at an annual rate of 11% compounded quarterly. Round your answer to the nearest cent.

a. $4,681.41

b. $4,434.18

c. $5,508.93

d. $5,816.09

e. $5,218.00

ANSWER: e

30. What lump sum should be deposited in an account that will earn at an annual rate of 7%, compounded quarterly, to grow to $90,000 for retirement in 20 years? Round your answer to the nearest cent.

a. $29,594.17

b. $5,741.36

c. $44,828.96

d. $14,219.12

e. $22,464.10

ANSWER: e

31. Find the interest that will result if $10,500 is invested at an annual rate of 9%, compounded continuously, for 12 years. Round your answer to the nearest cent.

a. $20,419.14

b. $30,919.14

c. $41,419.14

d. $30,002.97

e. $38,618.34

ANSWER: b

32. If $8,000 is invested at an annual rate of 7.5% compounded continuously, find the future value after 7.5 years. Round your answer to the nearest cent.

a. $17,868.03

b. $16,160.44

c. $24,641.73

d. $14,040.44

e. $2,218,178.28

ANSWER: d

33. Suppose an individual wants to have $160,000 available for her child’s education. Find the amount that would have to be invested at annual rate 7%, compounded continuously, if the number of years until college is 10 years. Round your answer to the nearest cent.

a. $73,508.13

b. $66,697.92

c. $79,453.65

d. $58,860.71

e. $89,285.62

ANSWER: c

34. How much more interest will be earned if $7,500 is invested for 7 years at an annual rate of 12% compounded continuously, instead of at 12% compounded quarterly? Round your answer to the nearest cent.

a. $17,372.75

b. $2,802.74

c. $213.29

d. $4,315.07

e. $5,301.40

ANSWER: c

35. What is the annual percentage yield (or effective annual rate) for a nominal rate of 8% compounded quarterly? Round your answer to two decimal places.

a. 11.1%

b. 6.56%

c. 8.54%

d. 8.24%

e. 9.64%

ANSWER: d

36. What is the annual percentage yield (or effective annual rate) for a nominal rate of 12% compounded continuously? Round your answer to two decimal places.

a. 16.18%

b. 12.75%

c. 11.53%

d. 14.26%

e. 18.70%

ANSWER: b

37. Rank each interest rate and compounding scheme in order from highest yield to lowest yield.

a. 6.5% compounded semi-annually, 6.5% compounded monthly, 6.5% compounded continuously

b. 6.5% compounded monthly, 6.5% compounded continuously, 6.5% compounded semi-annually

c. 6.5% compounded continuously, 6.5% compounded semi-annually, 6.5% compounded monthly

d. 6.5% compounded continuously, 6.5% compounded monthly, 6.5% compounded semi-annually

e. 6.5% compounded semi-annually, 6.5% compounded continuously, 6.5% compounded monthly

ANSWER: d

38. If $11,000 had been invested in the Fictious Fund on June 30, 1991, then on June 30, 2000 the investment would have been worth $34,575.25. What interest rate compounded annually would this investment have earned? Round your answer to two decimal places.

a. 27.14%

b. 13.57%

c. 11.27%

d. 15.33%

e. 6.79%

ANSWER: b

39. How long (in years) would $700 have to be invested at an annual rate of 11%, compounded continuously, to amount to $1,376? Round your answer to two decimal places.

a. 7.37 years

b. 6.76 years

c. 7.99 year

d. 3.69 years

e. 6.14 years

ANSWER: e

40. To help their son buy a car on his 16th birthday, a boy’s parents invest $800 on his 11th birthday. If the investment pays an annual rate of 11% compounded continuously, how much is available on his 16th birthday? Round your answer to the nearest cent.

a. $1,154.33

b. $1,386.60

c. $1,265.15

d. $1,590.99

e. $2,000.75

ANSWER: b

41. How long does it take for an account containing $5,500 to be worth $13,600 if the money is invested at 12% compounded monthly? Round your answer to the one decimal place.

a. 8.8 years

b. 6.3 years

c. 7.6 years

d. 8.2 years

e. 9.5 years

ANSWER: c

42. Suppose Emily Yu deposited $1,400 in an account that earned simple interest at an annual rate of 10% and left it there for 3 years. At the end of the 3 years, Emily deposited the entire amount from that account into a new account that earned 10% compounded quarterly. She left the money in this account for 8 years. How much did she have after the 11 years? Round your answer to the nearest cent.

a. $4,010.84

b. $5,197.15

c. $3,429.86

d. $3,088.77

e. $8,672.19

ANSWER: a

43. Find the next three terms of the geometric sequence.

3, 9, 27,…

a. 4, 12, 36,…

b. 81, 243, 729,…

c. 108, 324, 972,…

d. 27, 81, 243,…

e. 108, 243, 729,…

ANSWER: b

44. Find the next three terms of the geometric sequence.

25, 5, 1,…

a. 0.2, 0.04, 0.008,…

b. 0.125, 1, 0.015625,…

c. 0.125, 0.015625, 0.001953125,…

d. 64, 1, 0.001953125,…

e. 1, 0.2, 0.04,…

ANSWER: a

45. What is the 7th term of the geometric sequence with first term 5 and common ratio 2?

a. 5

b. 160

c. 3,645

d. 640

e. 320

ANSWER: e

46. Write an expression that gives the requested term or sum.

The sum of the first 12 terms of the geometric sequence with first term 6 and common ratio 7.

a.

b.

c.

d.

e.

ANSWER: d

47. Which of the following expresses the sum of the first 27 terms of the geometric sequence 9, -6, 4….?

a.

b.

c.

d.

e.

ANSWER: b

48. If inflation causes the cost of automobiles to increase by 3.5% each year, what should a car cost today if it cost $21,000 4 years ago? Round your answer to the nearest cent.

a. $25,525.63

b. $24,923.28

c. $24,462.21

d. $24,097.98

e. $23,803.02

ANSWER: d

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