PAPER INSTRUCTIONS:

- At age 32, you have assets of $281,411 and liabilities of $269,023. What is your net worth?

Net worth:

- The French bank Société Générale reported its net income was 29,561 million euros and its operating expenses totaled 18,416 million euros. What was its gross profit?
**(Enter your answer in millions of euros.)**

Gross Profit:

- Diane Van Os decided to buy a new car since her credit union was offering such low interest rates. She borrowed $32,000 at 4% on December 06 2016, and paid it off February 27 2018. How much did she pay in interest? (Assume exact interest.) (Use Days in a year table.)
**(Do not round intermediate calculations. Round your answer to the nearest cent.)**

Interest paid:

- Pam Wedel borrowed $15,900 to pay for her child’s education at Riverside Community College. Leslie must repay the loan at the end of 11 months in one payment with 445%445% interest.
**a.**How much interest must Leslie pay?**(Do not round intermediate calculation. Round your answer to the nearest cent.)**

**b.** What is the maturity value? **(Do not round intermediate calculation. Round your answer to the nearest cent.)**

**5.**** **On September 12, Jody Jansen went to Sunshine Bank to borrow $3,000 at 5% interest. Jody plans to repay the loan on January 27. Assume the loan is on ordinary interest. (Use Days in a year table.)

**a.** What interest will Jody owe on January 27?** (Do not round intermediate calculations. Round your answer to the nearest cent.)**

**b.** What is the total amount Jody must repay at maturity? **(Do not round intermediate calculations. Round your answer to the nearest cent.)**

- On May 3, 2017, Leven Corp. negotiated a short-term loan of $870,000. The loan is due October 1, 2017, and carries a 6.80% interest rate. Use ordinary interest to calculate the interest.

What is the total amount Leven would pay on the maturity date? (Use Days in a year table.) **(Do not round intermediate calculations. Round your answer to the nearest cent.**)

- Gordon Rosel went to his bank to find out how long it will take for $2,400 to amount to $2,860 at 5% simple interest. Calculate the number of years.
**(Round time in years to the nearest tenth.)**

**Number of years:**

- Lucky Champ owes $214.20 interest on a 7% loan he took out on his March 17 birthday to upgrade an oven in his Irish restaurant, Lucky’s Pub and Grub. The loan is due on August 17. What is the principal?
**(Use 360 days a year. Do not round intermediate calculations.)**

- On April 5, 2017, Janeen Camoct took out an 11% loan for $34,000. The loan is due March 9, 2018. Use ordinary interest to calculate the interest. Sabrina Bowers took out the same loan as Janeen. Sabrina’s terms, however, are exact interest. (Use Days in a year table.)
**a.**What is Sabrina’s difference in interest?**(Do not round intermediate calculations. Round your answer to the nearest cent.)****b.**What will she pay on March 9, 2018?**(Round your answer to the nearest cent.)**

10. Max Wholesaler borrowed $1,500 on a 6%, 120-day note. After 45 days, Max paid $525 on the note. Thirty days later, Max paid an additional $450. Use ordinary interest.

**a.** Determine the total interest use the U.S. Rule. **(Do not round intermediate calculations. Round your answer to the nearest cent.)**

**b.** Determine the ending balance due use the U.S. Rule.** (Do not round intermediate calculations. Round your answer to the nearest cent.)**

- Joanne and Ed Greenwood built a new barn with an attached arena. To finance the loan, they paid $1,301 interest on $54,300 at 4%. What was the time, using exact interest?
**(Do not round intermediate calculations. Round up your answer to the nearest day.)** - Carol Miller went to Europe and forgot to pay her $640 mortgage payment on her New Hampshire ski house. For her 48 days overdue on her payment, the bank charged her a penalty of $23. What was the rate of interest charged by the bank?
**(Use 360 days a year. Do not round your intermediate calculations. Round your answer to the nearest hundredth percent.)** - Joe Levi bought a home in Arlington, Texas, for $147,000. He put down 25% and obtained a mortgage for 30 years at 6%.

**a.**What is Joe’s monthly payment?**(Do not round intermediate calculations. Round your answer to the nearest cent.)**

**b. **What is the total interest cost of the loan? **(Do not round intermediate calculations. Round your answer to the nearest cent.)**

- Mortgage lenders base the mortgage interest rate they offer you on your credit rating. This makes it financially critical to maintain a credit score of 740 or higher. How much more interest would you pay on a $184,000 home if you put 20% down and financed the remaining with a 30-year mortgage at 6% interest compared to a 30-year mortgage at 3.5% interest?
**(Do not round intermediate calculations. Round your answer to the nearest cent.)**

Excess Interest:

- Daniel and Jan agreed to pay $546,000 for a four-bedroom colonial home in Waltham, Massachusetts, with a $50,000 down payment. They have a 30-year mortgage at a fixed rate of 6.00%.

**a.** How much is their monthly payment? **(Do not round intermediate calculations. Round your answer to the nearest cent.)**

- You can save a significant amount of mortgage interest paid if you make one additional principal and interest payment a year. This will reduce a 30-year mortgage by around 6 years. It also increases your equity in the home faster. If you choose to pay one additional mortgage payment a year by paying 1/12 of it each month (make certain to note the extra money is to reduce principal), how much will you pay each month for a mortgage of $162,000 at 5% for 15 years?
**(Do not round intermediate calculations. Round your answer to 2 decimal places.)**

Monthly payment:

- Rick Rueta purchased a $77,000 home at 8.5% for 30 years with a down payment of $15,000. His annual real estate tax is $1,692 along with an annual insurance premium of $852. Rick’s bank requires that his monthly payment include an escrow deposit for the tax and insurance. What is the total payment each month for Rick?
**(Round your answer to the nearest cent.)**

Total monthly payment:

- Sam Long anticipates he will need approximately $225,200 in 11 years to cover his 3-year-old daughter’s college bills for a 4-year degree. How much would he have to invest today at an interest rate of 10 percent compounded semiannually?
**(Do not round intermediate calculations. Round your answer to the nearest cent.)**

Amount:

- Lynn Ally, owner of a local Subway shop, loaned $44,000 to Pete Hall to help him open a Subway franchise. Pete plans to repay Lynn at the end of 8 years with 10% interest compounded semiannually.

How much will Lynn receive at the end of 8 years? **(Do not round intermediate calculations.** **Round your answer to the nearest cent.)**

Future value:

- Marit Brunsell deposited $65,000 at Bank of America at 8% interest compounded quarterly.

What is the effective rate (APY)?** ****(Do not round intermediate calculations. Round your answer to the nearest hundredth percent.)**

- Lee Holmes deposited $16,900 in a new savings account at 8% interest compounded semiannually. At the beginning of year 4, Lee deposits an additional $41,900 at 8% interest compounded semiannually.

At the end of 6 years, what is the balance in Lee’s account? **(Do not round intermediate calculations. Round your answer to the nearest cent.)**

- The International Monetary Fund is trying to raise $1,050 billion in 9 years for new funds to lend to developing countries. At 4% interest compounded quarterly, how much must it invest today to reach $1,050 billion in 9 years?
**(Do not round intermediate calculations. Enter your answer in billions of dollar rounded to 2 decimal places.)**

Present value_______ billion:

- Pete Air wants to buy a used Jeep in 4 years. He estimates the Jeep will cost $17,200. Assume Pete invests $12,200 now at 8% interest compounded semiannually.

**a.** Calculate the maturity value of the investment. **(Do not round intermediate calculations. Round your answer to the nearest cent.)**

**b.** Will Pete have enough money to buy his Jeep at the end of 4 years?

No

Yes

- Earl Ezekiel wants to retire in San Diego when he is 65 years old. Earl is now 43. He believes he will need $480,000 to retire comfortably. To date, Earl has set aside no retirement money. Assume Earl gets 6% interest compounded semiannually.

How much must Earl invest today to meet his $480,000 goal?**(Do not round intermediate calculations. Round your answer to the nearest cent.)**

Investment:

- John Regan, an employee at Home Depot, made deposits of $760 at the end of each year for 6 years. Interest is 6% compounded annually. What is the value of Regan’s annuity at the end of 6 years?
**(Do not round intermediate calculations. Round your answer to the nearest cent.)**

- Ed Long promised to pay his son $470 semiannually for 11 years. Assume Ed can invest his money at 4% in an ordinary annuity. How much must Ed invest today to pay his son $470 semiannually for 11 years?
**(Do not round intermediate calculations. Round****your answer to the nearest cent.)**

- After paying off a car loan or credit card, don’t remove this amount from your budget. Instead, invest in your future by applying some of it to your retirement account. How much would $520 invested at the end of each quarter be worth in 12 years at 6% interest?
**(Do not round intermediate calculations. Round****your answer to the nearest cent.)**

- Patricia and Joe Payne are divorced. The divorce settlement stipulated that Joe pay $550 a month for their daughter Suzanne until she turns 18 in 3 years. Interest is 6% a year. How much must Joe set aside today to meet the settlement?
**(Do not round intermediate calculations. Round your answer to the nearest cent.)**

- Toby Martin invests $1,400 at the end of each year for 11 years in an ordinary annuity at 10% interest compounded annually. What is the final value of Toby’s investment at the end of year 11?
**(Do not round intermediate calculations. Round your answer to the nearest cent.)**

Future value:

- Jeff Associates borrowed $32,000. The company plans to set up a sinking fund that will repay the loan at the end of 6 years. Assume a 10% interest rate compounded semiannually. What must Jeff pay into the fund each period of time?
**(Do not round intermediate calculations. Round your answer to the nearest cent.)**

Payable amount:

- You are earning an average of $45,700 and will retire in 10 years. If you put 20% of your gross average income in an ordinary annuity compounded at 7% annually, what will be the value of the annuity when you retire?
**(Do not round intermediate calculations. Round****your answer to the nearest cent.)**

Annuity value:

- A local Dunkin’ Donuts franchise must buy a new piece of equipment in 6 years that will cost $82,000. The company is setting up a sinking fund to finance the purchase. What will the quarterly deposit be if the fund earns 12% interest?
**(Do not round intermediate calculations. Round****your answer to the nearest cent.)**

Quarterly deposit:

- Al Vincent has decided to retire to Arizona in 11 years. What amount should Al invest today so that he will be able to withdraw $23,000 at the end of each year for 16 years
*after*he retires? Assume he can invest the money at 7% interest compounded annually.**(Do not round intermediate calculations. Round****your answer to the nearest cent.)**

**Present value:**

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