Multiple Choice
Identify the choice that best
completes the statement or answers the question.
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1.
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Principal of $1750 is invested at 2% simple interest, paid semi-annually, for
1.5 years. What is the rate of return?
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2.
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Determine the present value of a 2-year GIC with an interest rate of 2%,
compounded annually, if the future value is $1326.51.
A. | $1200 | B. | $1250 | C. | $1275 | D. | $1300 |
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3.
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A $6000 investment grows to $7351.81 in 5.5 years. If the investment has
interest compounded monthly, determine the interest rate.
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4.
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A 6-year bond has an interest rate of 4.85%, compounded quarterly, and a future
value of $70 000. Determine the ratio of future value to present value.
A. | 1.335 | B. | 1.263 | C. | 1.438 | D. | 1.294 |
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5.
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This portfolio was started 4 years ago. What is the current value of the
portfolio?
• A $4000 bond earning 2.9%, compounded semi-annually
• Quarterly
deposits of $650 into an account earning 3.25%, compounded quarterly
A. | $15 410.17 | B. | $15 546.67 | C. | $15
661.37 | D. | $15 868.07 |
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6.
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Carmen must now pay $9000 to pay off her bank loan, which she borrowed 10 years
ago. The loan was compounded monthly at an interest rate of 5.2%. How much did Carmen originally
borrow?
A. | $15 121.25 | B. | $5421.07 | C. | $5356.70 | D. | $5921.05 |
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7.
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A company replaces its trucks after the trucks have been used for 8 years. The
company uses a depreciation rate of 35%. If after 3 years of use a truck is worth $27 000, what will
it be worth when the company replaces it?
A. | $860.34 | B. | $7414.88 | C. | $3132.78 | D. | $141.81 |
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8.
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Johanna needs a place to live. She can either rent an apartment or buy a new
house. Renting costs $300 per week. She can finance the purchase of a house that costs $280 000 with
a mortage. She has negotiated with the bank a mortgage of 87% of the purchase price at an interest
rate of 3.9%, compounded semi-annually. The term of the mortgage is 15 years and it requires regular
monthly payments. The house depreciates at a rate of 4%. If she moves out after 6 years, what is her
total cost of living in the apartment?
A. | $164 984.20 | B. | $93 600.00 | C. | $21
600.00 | D. | $130 000.00 |
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9.
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Jace needs special equipment for his job as a landscaper. He has two options. He
can buy the equipment which costs $9600. Jace will finance this purchase through the vendor by making
regular monthly payments over 4 years at an interest rate of 6.2%, compounded monthly. At the end of
the 4 years, the equipment will be worthless. He can also lease the equipment at a cost of $180 per
month. Both options require a down payment of $750. What is the total cost of the cheaper
option?
A. | $9390.00 | B. | $10 765.44 | C. | $10
015.44 | D. | $7890.00 |
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10.
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Which inequality represents the graph shown
below?
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11.
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The graphical solution to y <  x  is
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A sports store makes a profit of $50 on every
pair of cross-country skis sold and $125 on every set of snowshoes sold. The manager’s goal is
to have a profit of at least $700 a day from the sales of these two items.
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12.
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If x represents the number of pairs of
cross-country skis sold and y represents the number of pairs of snowshoes sold, what
inequality models the combinations of ski and snowshoe sales that will meet or exceed the daily
profit goal?
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13.
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Which graph represents the combinations of ski and
snowshoe sales that will meet or exceed this daily sales goal?
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A banquet room can seat up to 600 guests. Each
rectangular table seats 11 guests and each circular table seats 6 guests.
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14.
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If r represents the number of rectangular
tables and c represents the number of circular tables, which graph represents the possible
combinations of rectangular and circular tables?
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15.
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Which point does not satisfy the inequality
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Short Answer
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1.
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This portfolio was started 20 years ago. How much interest has the portfolio
earned?
• Annually investments of $1500 into GICs earning 3.5%, compounded
annually
• A $6000 investment averaging 6.42%, compounded monthly
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2.
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Lawrence is planning to take a cruise. The cruise costs $4500 and he wants to
finance the trip with a credit card. He wants to pay off the debt in a year by making regular monthly
payments and he has two different options:
• Card 1 charges 14.9%, compounded daily, with an
annual fee of $125 that is added to the first month’s balance.
• Card 2 charges 16.1%,
compounded daily.
If Lawrence makes no other purchases on credit, what is the total cost of the
cheaper option?
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3.
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Yorgan is buying his friend’s used car for $5000. He cannot afford it now
but he has two different options to finance the cost.
Option A: Get a loan from his friend that
must be paid back in 1 year with a $1000 fee.
Option B: Use his credit card which charges 16.7%,
compounded daily. He plans to make the minimum monthly payment of $100 on the debt for 1 year, then
pay off the debt in full.
What annual interest rate does the fee in Option A equate to if you
assume the interest compounds monthly?
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Problem
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1.
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The length of a rectangle, l metres, is
greater than or equal to 1 m less than twice the width, w metres.
a) Write an
inequality to describe the situation.
b) What are the restrictions on the length and
width?
c) Graph l versus w for the inequality.
d) List three
possible sets of dimensions for the rectangle.
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2.
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A square storage area measures 10 m on a side. By
how much must each side be shortened to decrease this area to less than half the original
area?
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