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Chapter 2 Review 1- 2.1-2.5

Last updated over 1 year ago

14 questions

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Question 1

1.

Compound interest earns more than simple interest at the same interest rate because compounding pays interest on the interest earned.

True

False

Question 2

2.

LaToya has $113.94 in her checking account. During the week, she goes to an ATM and withdraws $40. She is charged a usage fee of $2.50. The following week she deposits her paycheck of $189.73. She writes two checks, one for $22.50 and the other for $70.18. What is the current balance in her checking account?

$168.49

$145.99

$170.99

-$21.24

Question 3

3.

Conrad Savings Bank has a $50 overdraft fee. On Friday, Mr. McQuire deposited his paycheck of $468.92 for a total account balance of $712.34. The next morning, his wife wrote a check for $1,267.45 for a new refrigerator and stove. The check cleared the bank by the end of the day. What is the current balance in the McQuires’ account?

–$798.53 

–$605.11

–$405.11

–$555.11

Question 4

4.

Amy opened a savings account with $1,750 she received for graduation. The account pays 4.3% simple interest. What is the balance after 6 months? Round to the nearest cent (2 decimals) and don't forget your dollar sign and decimal.

Question 5

5.

Tammy sold a diamond ring for $10,000. She placed half of the money into a CD with a 3.9% interest rate compounded daily. She placed the other half into a CD with the same interest rate but compounded monthly. What is the difference in the interest earned on each amount after 4 years?

Question 6

6.

Sonja and Jake just got married. They received $4,500 in gift money and deposited it into a savings account that pays 2.85% simple interest. Type in the equation you would use to solve the problem if they have it in savings after 3 years? Make sure to include I=

Question 7

7.

Ron and Annie have $1,239.45 in their checking account. During the week, Annie goes to an ATM and withdraws $80. The following week Ron deposits his paycheck of $689.65. Annie then pays bills online in the amounts of: $212.80, $55, $49.76, and $110.35. What is the current balance in their checking account? Round to the nearest cent (2 decimals) and don't forget your dollar sign and decimal.

Question 8

8.

Interest compounded semiannually is compounded four times a year.

True

False

Question 9

9.

Ridgewood Savings Bank charges a $27 per check overdraft protection fee. On July 8, Nancy had $1,400 in her account. Over the next four days, the following checks arrived for payment at her bank: July 9, $1,380.15; July 10, $70 and $95.67; July 11, $130; and July 12, $87.60.
How much will she pay in overdraft protection fees?

$108.00

$108

Question 10

10.

Ken filled out this information on the back of his bank statement. Find Ken's revised statement balance. Does his account reconcile? _________________

Yes

No

Question 11

11.

The sixth-grade class at West Side School starts a charity collection on Monday, with $78 donated by the Parents Organization. They plan to add $2 to the fund each day. How much will they have after 90 days?

Question 12

12.

What interest rate is needed for $9,500 to earn $900 in 19 months? Round to the nearest hundredth of a percent. Don't forget your percent sign.

Question 13

13.

Find the simple interest on a $2,350 principal deposited for six years at a rate of 2.77%.

Question 14

14.

Austin deposits $2,250 into a three-year CD at an interest rate of 2.3%, compounded daily. Write down the formula (with values filled in) that you would use to solve this problem.