Mathematical Ideas 13th Edition By Miller – Test Bank

1. Use estimation to select the best response. Do not calculate.

If you deposit $100 in a bank account for a year, what is the future value likely to be?

a. $105
b. $1
c. $300
d. $5
e. impossible to estimate
ANSWER: a
POINTS: 1
QUESTION TYPE: Multi-Mode (Multiple choice)
HAS VARIABLES: True
OTHER: smnm11.11.01.05m
DATE CREATED: 12/25/2015 6:02 AM
DATE MODIFIED: 12/25/2015 6:02 AM

2. Use estimation to select the best response. Do not calculate.

If and P = $120,192.31, r = 10.4%, and t = 2 years, estimate I.

a. $5,000
b. $25,000
c. $250,000
d. $2,500
e. $125,000
ANSWER: b
POINTS: 1
QUESTION TYPE: Multi-Mode (Multiple choice)
HAS VARIABLES: True
OTHER: smnm11.11.01.11m
DATE CREATED: 12/25/2015 6:02 AM
DATE MODIFIED: 12/25/2015 6:02 AM

3. Calculate the amount of simple interest earned.

$1,000 at 8% for 3 years

a. $240
b. $2,400
c. $3,000
d. $80
e. $4,800
ANSWER: a
POINTS: 1
QUESTION TYPE: Multi-Mode (Multiple choice)
HAS VARIABLES: True
OTHER: smnm11.11.01.16m
DATE CREATED: 12/25/2015 6:02 AM
DATE MODIFIED: 12/25/2015 6:02 AM

4. Find the future value, using the future value formula and a calculator.

$1,000 at % simple interest for 4 years

a. $1,310.00
b. $1,280.00
c. $1,560.00
d. $690.00
e. $310.00
ANSWER: a
POINTS: 1
QUESTION TYPE: Multi-Mode (Multiple choice)
HAS VARIABLES: True
OTHER: smnm11.11.01.20m
DATE CREATED: 12/25/2015 6:02 AM
DATE MODIFIED: 12/25/2015 6:02 AM

5. Find the present value, using the present value formula and a calculator.

Achieve $8,000 in two years at 4.5% simple interest.

a. $6,560.00
b. $7,280.00
c. $720.00
d. $8,791.21
e. $7,339.45
ANSWER: e
POINTS: 1
QUESTION TYPE: Multi-Mode (Multiple choice)
HAS VARIABLES: True
OTHER: smnm11.11.01.26m
DATE CREATED: 12/25/2015 6:02 AM
DATE MODIFIED: 12/25/2015 6:02 AM

6. If $8,000 is invested at 6.5% for 7 years, find the future value if the interest is compounded daily. Use a 365-day year.

a. $12,600.09
b. $12,608.88
c. $12,604.73
d. $12,609.08
e. $12,607.83
ANSWER: b
POINTS: 1
QUESTION TYPE: Multi-Mode (Multiple choice)
HAS VARIABLES: True
OTHER: smnm11.11.01.31m
DATE CREATED: 12/25/2015 6:02 AM
DATE MODIFIED: 12/25/2015 6:02 AM

7. Find the cost of a CD in 7 years, assuming an inflation rate of 6%, if its present cost is $16.95.

a. $25.80
b. $42.75
c. $26.48
d. $24.07
e. $28.38
ANSWER: a
POINTS: 1
QUESTION TYPE: Multi-Mode (Multiple choice)
HAS VARIABLES: True
OTHER: smnm11.11.01.36m
DATE CREATED: 12/25/2015 6:02 AM
DATE MODIFIED: 12/25/2015 6:02 AM

8. Calculate the time necessary to achieve the investment goal. Give your answer to the nearest day. Use a 365-day year.

$1,000 at 6% simple interest; deposit $800

a. 4 year 62 days
b. 4 year 304 days
c. 4 year 76 days
d. 4 year 69 days
e. 4 year 61 days
ANSWER: e
POINTS: 1
QUESTION TYPE: Multi-Mode (Multiple choice)
HAS VARIABLES: True
OTHER: smnm11.11.01.53m
DATE CREATED: 12/25/2015 6:02 AM
DATE MODIFIED: 12/25/2015 6:02 AM

9. If Rita receives $34.06 interest for a deposit earning 4% simple interest for 260 days, what is the amount of her deposit to the nearest dollar? Use a 360-day year.

a. $1,061
b. $1,179
c. $1,238
d. $1,120
e. $1,297
ANSWER: b
POINTS: 1
QUESTION TYPE: Multi-Mode (Multiple choice)
HAS VARIABLES: True
OTHER: smnm11.11.01.48m
DATE CREATED: 12/25/2015 6:02 AM
DATE MODIFIED: 12/25/2015 6:02 AM

10. Find the effective yield for the investment. Round to the nearest hundredth of a percent. Use a 365-day year.

4%, compounded quarterly

a. 4.07%
b. 4.06%
c. 4.16%
d. 4.04%
e. 4.08%
ANSWER: b
POINTS: 1
QUESTION TYPE: Multi-Mode (Multiple choice)
HAS VARIABLES: True
OTHER: smnm11.11.01.60m
DATE CREATED: 12/25/2015 6:02 AM
DATE MODIFIED: 12/25/2015 6:02 AM