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Chapter 3 Review Quiz

This document contains a 20 question review quiz about investments, loans, and banking costs. The questions cover calculating future values of investments with compound interest, comparing simple vs compound interest returns, calculating interest earned, determining dividend yields, using the declining balance method to calculate depreciation, calculating loan repayment amounts and interest paid, daily interest rates on credit cards, and banking fees.

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A. Z
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© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
64 views

Chapter 3 Review Quiz

This document contains a 20 question review quiz about investments, loans, and banking costs. The questions cover calculating future values of investments with compound interest, comparing simple vs compound interest returns, calculating interest earned, determining dividend yields, using the declining balance method to calculate depreciation, calculating loan repayment amounts and interest paid, daily interest rates on credit cards, and banking fees.

Uploaded by

A. Z
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter 3 Investments and loans review quiz

1. Isabelle invests $18 000 over 5 years at a 12. A used car is bought for $19 990. It will
compound interest rate of 4.9% p.a. Calculate depreciate at 18% per annum. Using the
the future value after 5 years. Answer correct declining balance method, what is the salvage
to the nearest cent. value of the car after 3 years? Answer to the
2. Lily and Ryan each receive a $50 000 nearest dollar.
inheritance and decide to invest it for four 13. A motor vehicle was purchased for $6200. At
years. Lily invests her money at 3% p.a. simple the end of each year the declining balance
interest, while Ryan invests his money at method of depreciation is used to estimate the
3% p.a. compound interest, compounded value of the car. The annual rate of
monthly. Who made the better investment and depreciation is 18%. What is the approximate
by how much? value of the vehicle after 4 years?
3. Alexis invests $1600 for 3 years at 8% p.a. 14. Isla borrows $4 800 for a trip to Singapore. She
compounding quarterly. How much compound repays the loan over 2 years at an interest rate
interest will Alexis receive? of 6% p.a. compounding monthly. What is Isla’s
4. Blake invested $3500 at 6.5% p.a. monthly instalment?
compounding annually for 4 years 15. Thomas takes out a $14,000 loan over 36
a. How much does Blake have after 4 years? months. The repayment rate is $485.38 per
Answer to the nearest cent. month
b. How much interest did Blake earn during a. How much will Thomas pay back
the 4 years? altogether?
5. Paige invested $35 000 into an account that b. What is the equivalent flat rate of interest
pays compound interest at a rate of 3.9% p.a. for the loan? Answer correct to two decimal
compounding biannually. places.
a. Calculate the balance of the account after 16. Levi borrows $246 000 over 7 years at an
the first 6 months. interest rate of 17.9% p.a. reducible. He pays
b. What is the interest earned on this $2150 per fortnight
investment after 10 years? a. How much will Levi pay back altogether?
6. Nathan invests $12 000 in an account paying b. What is the interest paid for this loan?
4.8% pa interest, compounded monthly. What 17. Jacob owns a credit card that has no annual
is the future value after 1.5 years? fees and charges 15.7% p.a. simple interest on
7. A painting was bought for $695 at the all purchases. The interest is charged from the
beginning of 2018. It is expected that the day of purchase, including the day of purchase.
painting will appreciated in value by 8% each a. Show that the daily interest rate is
year. What will be the value of the painting at 0.0430%.
the end of 2029? Answer to the nearest dollar. b. On the 30th of March, Jacob bought an
8. Holly has 3000 shares. The current share price entertainment unit for $1240 using his
is $2.25 per share. Holly is paid a dividend of credit card. Jacob paid his credit card
$0.07 per share. account on the 10th of April. What was the
a. What is the current value of her shares? total amount Jacob paid for the
b. Calculate the dividend yield. Answer to the entertainment unit, including interest?
nearest whole number. Answer correct to the nearest cent.
9. Daniel bought 1500 shares for $1.70 each. In 18. Jayden has a credit card debt of $7895 that will
July he received a dividend of 24 cents per accrue interest at the rate of 19.4% p.a.
share. compounding daily. After one month (30 days),
a. How much did Daniel receive in dividends? what is the amount he will owe?
b. In July the market value of the shares was 19. has a daily interest rate of 0.07% per day (no
$1.80 per share. What is the dividend yield? interest free period). Find the interest charged
Answer correct to one decimal place. on $4300 for 15 days. Answer correct to the
10. A ute is purchased for $35,000. Use the nearest cent.
declining balance method to calculate the 20. Zoe’s bank charged a balance transfer fee of
salvage value of the car after 4 years at a $37, cash advance fee of $1.48 and late
depreciation rate of 15% per annum. payment fee of $14. What are Zoe’s banking
11. William purchased a luxury car for $83 700. It costs if she made 12 cash advances and 1 late
depreciates at 16% per year. How much has the payment?
luxury car depreciated over four years?
© G K Powers 2018 Published by Cambridge University Press 1

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