Test Review

1. You borrow $4500 from a bank that charges simple interest at 7% per year.
If it takes 6 months to repay the loan, how much interest will you be
charged?

2. Chhey invested $800. 6 years later she had $ 944. How much interest did
she earn?

3. Tom invests $2500 at 4% over 5 years compounded monthly. Determine the

value of the investment.
4. Using the rule of 72, solve the following problems:

1. Roma invests $4000 over 6 years and then had $8000. What was the
interest rate?

2. If Mac invests $2000 at 9%, how long will it take for her to money to
double?

5. Shally has a credit card with an annual interest rate charge of 21.22% and a
monthly limit of $8000. She had a previous balance of $2600 and made
purchases totaling $380. She made a payment of only $1200. Her minimum
monthly payment must be $100 or 5% whichever is greater. Calculate the
following:

a) The monthly interest rate .

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b) The new interest charge .

c) The new balance

d) The minimum payment required.

e) The credit available.

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6. Carlee likes to shop. She wants to buy a 48 LED TV with Bose surround-
sound. She found one at Best Buy for $5500. Do you think she has this kind
of money just laying around? I dont think so! She needs a loan. She decides
that she can handle a loan for 2 years. Using the attached tables,
determine:

a) Carlees monthly payments for this loan.

b) The amount of interest Carlee will pay for this loan.

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Circle any numbers you use from these tables:

Table 1:

Range 1 year 2 years 3 years 4 years 5 years

Less than $5000 12.75% 12.75% - - -
$5000 - $15 000 9.75% 10.00% 10.25% 10.50% 11.00%
$15 000 - $30 9.25% 9.75% 9.75% 10.00% 10.25%
000
Over $30 000 8.50% 8.75 9.25% 9.50% 9.75%
Table 2:

Personal Loan Payment

Monthly Payment per $1000
Annual Interest 1 year 2 years 3 years 4 years 5 years
6.00%
Rate 86.07 44.33 30.43 23.49 19.34
6.25% 86.18 44.44 30.54 23.61 19.46
6.50% 86.30 44.56 30.66 23.72 19.57
6.75% 86.41 44.67 30.77 23.84 19.69
7.00% 86.53 44.78 30.88 23.95 19.81
7.25% 86.64 44.89 31.00 24.07 19.93
7.50% 86.76 45.01 31.11 24.19 20.05
7.75% 86.87 45.12 31.23 24.30 20.16
8.00% 86.99 45.24 31.34 24.42 20.28
8.25% 87.10 45.34 31.45 24.53 20.40
8.50% 87.22 45.46 31.57 24.65 20.52
8.75% 87.34 45.57 31.68 24.71 20.64
9.00% 87.45 45.68 31.80 24.89 20.76
9.25% 87.57 45.80 31.92 25.00 20.88
9.50% 87.68 45.91 32.03 25.12 21.00
9.75% 87.80 46.03 32.15 25.24 21.12
10.00% 87.92 46.14 32.27 25.36 21.25
10.25% 88.03 46.26 32.38 25.48 21.37
10.50% 88.15 46.38 32.50 25.60 21.49
10.75% 88.27 46.49 32.62 25.72 21.62
11.00% 88.38 46.61 32.74 25.85 21.74
11.25% 88.50 46.72 32.86 25.97 21.87
11.50% 88.62 46.84 32.98 26.09 21.99
11.75% 88.73 46.96 33.10 26.21 22.12

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7. Tom needs to buy new kitchen appliances for $3500 (plus taxes) from Home
depot Warehouse. They are offering the following sweet promotion to
entice customers to shop there:

Option 1 Pay Now: pay full price, plus PST, GST and a delivery charge of
$50 (including taxes)

Option 2 Pay Later: pay taxes, delivery charge of $50 (including taxes), a
$60 admin. fee (plus taxes) and pay the $3500 (plus taxes) one year
from now.

a) Calculate Toms pay-now price.

b) Calculate Toms total pay-later price.

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c) How much more would he pay if he chooses the pay-later deal?

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1. $ 157.50

2. 3%

3. $ 3052.49

4. 1. 12%, 2. 8 years

5. a) 1.77%, b) $ 24.78, c) 1804.78, d) $ 100, e) $ 6195.22

6. a) $ 253.77, b) $ 590.48

7. a) $ 4005, b) $ 4072.80, c) $ 67.80