Solution Manual for Mathematics with Applications In

the Management Natural and Social Sciences 11th

Edition Lial Hungerford Holcomb Mullins
9780321931078
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lial-hungerford-holcomb-mullins-9780321931078/
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CHAPTER 5 FORM A

Name

Find the simple interest. Round to the nearest cent.

1
1) $860 at 2% for 2 years
3

A) Interest = $40.13 B) Interest = $4.01

C) Interest = $1,003.33 D) Interest = $7.37

Find the exact interest. Use 365 days in a year, and use the exact number of days in a month. Assume simple
interest and discount. Round to the nearest cent, if necessary.
2) A loan of $180,000.00 at 7.5% made on June 1 and due on August 21.

A) $2,995.89 B) $3,037.50 C) $3,136.13 D) $3,375.00

Find the future value of the loan. Assume simple interest. Round to the nearest cent, if necessary.
3) $29,000 loan at 3.5% for 7 months.

A) $295,920.83 B) $29,592.08 C) $36,105.00 D) $88,208.33

The given Treasury bill was sold in August 2008. Find (i) the price of the T-bill, and (ii) the actual interest rate
paid by the Treasury. Round monetary amounts to the nearest cent and interest rates to the nearest thousandth.
Assume simple interest and discount.
4) One-year $9,000 T-bill with discount rate 2.020%

A) (i) $9,181.80; (ii) About 1.98% B) (i) $8,981.82; (ii) About 0.202%
C) (i) $8,781.84; (ii) About 2.484% D) (i) $8,818.20; (ii) About 2.062%

Find the compound amount for the deposit. Round to the nearest cent.
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 5) $9,000 at 3% compounded semiannually for 10 years

A) $12,121.70 B) $11,700.00 C) $10,444.87 D) $12,095.25

Find the compound interest earned by the deposit. Round to the nearest cent.
6) $1,300 at 6% compounded quarterly for 5 years

A) $450.91 B) $390.00 C) $439.69 D) $1,400.47

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Solve the problem.
7) Find the face value (to the nearest thousand dollars) of the 25-year zero-coupon bond at 4.4%
(compounded semiannually) with a price of $11,790.

A) $18,000 B) $35,000 C) $29,000 D) $25,000

Find the APY corresponding to the given nominal rates.

8) 7% compounded monthly

A) 7.30% B) 8.03% C) 6.65% D) 7.23%

Solve the problem. Round to the nearest cent.

9) Cerria made an initial deposit of $2,600 into a savings account. Assuming an interest rate of 5%
compounded quarterly, how much will the account be worth in 11 years?

A) $4,491.12 B) $4,476.09 C) $4,435.68 D) $3,459.86

Solve the problem.

10) Shreya purchased a bond for $7,250, and twenty (20) months later she sold it for $8,000. What annual
rate would she have to earn in a savings account, compounded monthly, to earn the same money on her
investment?

A) 10.34% B) 6.21% C) 5.92% D) 9.88%

Find the future value of the ordinary annuity.

11) R = $1000, i = 6.8% interest compounded annually for 15 years

A) $24,745.29 B) $39,451.17 C) $22,233.41 D) $3,693.93

Find the amount of each payment to be made into a sinking fund so that there will be enough money to
accumulate the following amount. Payments are made at the end of each period. The interest rate given is per
period.
12) $8,900; money earns 8% compounded annually; 6 annual payments

A) $1,517.06 B) $1,213.21 C) $997.44 D) $448.68

Find the interest rate needed for the sinking fund to reach the required amount. Assume that the compounding
period is the same as the payment period.
13) $36,000 to be accumulated in 5 years; quarterly payments of $1675. Round to the nearest hundredth.

A) 3.05% B) 2.97% C) 3.02% D) 3.00%

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Find the payment that should be used for the annuity due whose future value is given. Assume that the
compounding period is the same as the payment period.
14) $14,000; annual payments for 6 years; interest rate 4.3%.

A) $268.23 B) $1,013.27 C) $508.96 D) $2,008.44

Find the present value of the ordinary annuity.

15) Payments of $500 made annually for 18 years at 4% compounded annually

A) $6,086.20 B) $6,076.46 C) $6,582.83 D) $6,329.65

Find the payment made by the ordinary annuity with the given present value.
16) Present value $750,000, monthly payments for 35 years; interest rate is 4.8% compounded monthly.

A) $3,517.43 B) $3,521.03 C) $3,867.16 D) $3,690.03

Find the price a purchaser should be willing to pay for the given bond. Assume that the coupon interest is paid
twice a year.
17) $50,000 bond with coupon rate 2.75% that matures in 5 years; current interest rate is 3.2%.

A) $49,311.99 B) $49,947.06 C) $48,967.98 D) $49,020.92

Find the payment necessary to amortize the loan.

18) $9,000; 6% compounded monthly; 48 monthly payments

A) $205.21 B) $205.15 C) $199.06 D) $211.37

Find the monthly payment and estimate the remaining balance (to the nearest dollar). Assume interest is on the
unpaid balance.
19) 4-year car loan for $18,000 at 2.4%; remaining balance after 3 years.

A) $375.00; $4,500 B) $393.66; $13,661

C) $375.00; $4,442 D) $393.66; $4,663

Solve the problem.

20) Samantha borrowed $12,000 to purchase a car at an annual interest rate of 5.4%. She is to pay it back in
equal monthly payments over a 3 year period. What is her monthly payment?

A) $363.43 B) $361.81 C) $360.19 D) $364.52

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Answer Key
Testname: CHAPTER 5 FORM A

1) A
2) A
3) B
4) D
5) A
6) A
7) B
8) D
9) A
10) C
11) A
12) B
13) D
14) D
15) D
16) D
17) C
18) D
19) D
20) B

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CHAPTER 5 FORM B

Name

Find the simple interest. Round to the nearest cent.

1) $190 at 7.7% for 10 months

A) Interest = $1.46 B) Interest = $12.19

C) Interest = $1,219.17 D) Interest = $146.30

For the given bond, whose interest rate is provided, find the semiannual interest payment and the total interest
earned over the life of the bond. Assume simple interest.
2) $40,000 Nakatomi Trading Corporation 15-year bond at 8.5%

A) $160; $48,000 B) $3,400; $51,000

C) $170,000; $51,000 D) $1,700; $51,000

Find the present value of the future amount. Assume 365 days in a year. Assume simple interest and discount.
Round to the nearest cent.
3) $20,000 for 5 months; money earns 10%

A) $19,354.84 B) $18,181.82 C) $800.00 D) $19,200.00

Solve the problem. Assume 365 days in a year. Assume simple interest and discount.
4) Daniel borrowed $4,900 from his mother to buy a car. He repaid her after 7 months with simple interest
of 9%. Find the total amount he repaid.

A) $5,157.25 B) $5,120.50 C) $257.25 D) $5,341.00

Find the compound amount for the deposit. Round to the nearest cent.
5) $1,600 at 3% compounded quarterly for 3 years

A) $1,750.09 B) $1,744.00 C) $1,748.36 D) $1,636.27

Find the compound interest earned by the deposit. Round to the nearest cent.
6) $1,500 at 7.1% compounded annually for 13 years

A) $1,384.50 B) $1,916.37 C) $1,278.00 D) $2,158.93

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Solve the problem.
7) Find the price (to the nearest cent) you should be willing to pay for the 15-year $15,000 zero-coupon
bond with interest at 4.4% (compounded semiannually).

A) $1,194.61 B) $15,616.88 C) $4,121.70 D) $7,808.44

Find the amount that should be invested now to accumulate the following amount, if the money is compounded
as indicated.
8) $5,900 at 6% compounded annually for 12 years.

A) $11,871.96 B) $3,108.05 C) $2,932.12 D) $2,967.88

Solve the problem. Round to the nearest cent.

9) Chenyun Xu's savings account has a balance of $2,048. After 6 years what will the amount of interest be
at 5% compounded semiannually?

A) $709.68 B) $706.33 C) $715.85 D) $712.39

Solve the problem.

10) Cameron has money in an account at 5% interest, compounded monthly. To the nearest year, how long
will it take for his money to triple?

A) 21 years B) 13 years C) 20 years D) 22 years

Find the future value of the ordinary annuity.

11) R = $900, i = 8% interest compounded semiannually for 10 years

A) $24,904.11 B) $49,300.27 C) $22,488.80 D) $26,800.27

Find the amount of each payment to be made into a sinking fund so that there will be enough money to
accumulate the following amount. Payments are made at the end of each period. The interest rate given is per
period.
1
12) $77,000; money earns 9% compounded quarterly for 3 years
4

A) $2,211.54 B) $2,328.17 C) $5,164.92 D) $1,268.78

Find the future value of the annuity due.

13) $800 deposited at the beginning of each year for 11 years at 9% compounded annually

A) $22,137.12 B) $15,312.58 C) $11,354.34 D) $13,248.23

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Solve the problem.
14) If Sasha deposits $5000 at the end of each year for 6 years in an account paying 8% interest
compounded annually, find the amount she will have on deposit.

A) $36,679.65 B) $31,679.65 C) $29,333.00 D) $44,614.02

Find the present value of the ordinary annuity.

15) Payments of $500 made quarterly for 10 years at 4.2% compounded quarterly

A) $16,945.54 B) $16,262.52 C) $15,579.49 D) $15,607.02

Find the payment made by the ordinary annuity with the given present value.
16) Present value $500,000, quarterly payments for 25 years; interest rate is 4.8% compounded quarterly.

A) $9,026.10 B) $8,612.69 C) $8,211.39 D) $8,218.21

Find the price a purchaser should be willing to pay for the given bond. Assume that the coupon interest is paid
twice a year.
17) $30,000 bond with coupon rate 7% that matures in 11 years; current interest rate is 4%.

A) $37,946.12 B) $35,297.41 C) $29,917.74 D) $38,028.38

Find the monthly house payment necessary to amortize the following loan.
18) In order to purchase a home, a family borrows $275,000 at 3.24% for 30 years. What is their monthly
payment? Round the answer to the nearest cent.

A) $1,234.62 B) $1,157.25 C) $1,195.31 D) $788.64

Find the monthly payment and estimate the remaining balance (to the nearest dollar). Assume interest is on the
unpaid balance.
19) 5-year car loan for $23,000 at 1.8%; remaining balance after 3 years.

A) $408.48; $9,622 B) $408.35; $9,619 C) $401.13; $9,449 D) $408.41; $9,620

Solve the problem.

20) The Powell family purchases a $7,000 living room set and take out a two-year loan for the entire amount
at 9% with monthly payments. Immediately after the 14th of 24 payments is made, they decide to pay off the
loan. To the nearest dollar, how much is needed to pay the balance of the loan in full?

A) $4,477 B) $3,198 C) $4,235 D) $3,070

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Answer Key
Testname: CHAPTER 5 FORM B

1) B
2) D
3) D
4) A
5) A
6) D
7) D
8) C
9) B
10) D
11) D
12) C
13) B
14) A
15) B
16) B
17) A
18) C
19) C
20) D

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CHAPTER 5 FORM C

Name

Find the simple interest. Round to the nearest cent.

1) $2,500 at 7% for 17 months

A) Interest = $24,791.67 B) Interest = $2,975.00

C) Interest = $10.29 D) Interest = $247.92

For the given bond, whose interest rate is provided, find the semiannual interest payment and the total interest
earned over the life of the bond. Assume simple interest.
2) $4,000 Extreme Superstore 6-year bond at 4.75%

A) $95; $1,140 B) $80; $960

C) $190; $1,140 D) $9,500; $114,000

Find the present value of the future amount. Assume 365 days in a year. Assume simple interest and discount.
Round to the nearest cent.
3) $14,000 for 143 days; money earns 3%

A) $13,592.23 B) $162.64 C) $13,837.36 D) $13,838.49

Solve the problem. Assume 365 days in a year. Assume simple interest and discount.
4) William Morales receives proceeds of $7,087 after signing a 150-day note for $7,400. Find the discount
rate. Round to the nearest tenth.

A) 10.3% B) 8.3% C) 5.2% D) 4.2%

Find the compound amount for the deposit. Round to the nearest cent.
5) $1,080 at 8% compounded annually for 14 years

A) $2,203.20 B) $2,289.60 C) $3,172.17 D) $2,937.19

Find the interest rate (with annual compounding) that makes the statement true. Round to the nearest
hundredth when necessary.
6) $4,143.00 grows to $5,010.82 in 10 years.

A) 1.92% B) 2.40% C) 3.84% D) 1.44%

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Find the APY corresponding to the given nominal rates.
7) 5% compounded semiannually

A) 5.00% B) 5.06% C) 5.12% D) 5.09%

Find the amount that should be invested now to accumulate the following amount, if the money is compounded
as indicated.
8) $20,000 at 4% compounded semiannually for 6 years

A) $4,230.14 B) $15,806.29 C) $15,769.86 D) $25,364.84

Solve the problem. Round to the nearest cent.

9) Akahana Ito's savings account has a balance of $4,500. After 3 years what will the amount of interest be
at 6% compounded quarterly?

A) $859.57 B) $880.28 C) $885.06 D) $873.24

Find the sum. Round to four decimal places.

10) 1 + 1.02 + 1.022 + 1.023 + . . . + 1.0218

A) 122.8406 B) 0.2261 C) 22.8406 D) 21.4123

Find the future value of the ordinary annuity.

11) R = $2500, i = 8.7% interest compounded quarterly for 16 years

A) $455,552.17 B) $340,609.64 C) $330,912.29 D) $100,430.11

Find the amount of each payment to be made into a sinking fund so that there will be enough money to
accumulate the following amount. Payments are made at the end of each period. The interest rate given is per
period.
7
12) $71,000; money earns 7.5% compounded monthly for 1 years
12

A) $1,711.55 B) $391.76 C) $3,531.01 D) $1,661.13

Find the future value of the annuity due.

13) $200 deposited at the beginning of each quarter for 11 years at 7% compounded quarterly

A) $12,890.63 B) $13,319.72 C) $12,468.92 D) $3,377.69

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Solve the problem.
14) Rakesh wants to start a retirement account that will have $1,000,000 when he retires in 40 years. How
much should he invest annually in his retirement account to do this if the interest is 3% compounded
annually?

A) $12,864.51 B) $12,876.10 C) $13,262.38 D) $13,660.25

Find the amount necessary to fund the given withdrawals.

15) Quarterly withdrawals of $1,000 for 7 years; interest rate is 3.6% compounded quarterly.

A) $18,988.91 B) $20,414.63 C) $24,653.18 D) $22,614.27

Find the lump sum deposited today that will yield the same total amount as this yearly payment made at the end
of each year for 20 years at the given interest rate, compounded annually.
16) $1,000 at 3%

A) $14,877.47 B) $15,323.80 C) $14,431.15 D) $14,444.15

Find the payment necessary to amortize the loan.

17) $57,000; 4% compounded annually; 10 annual payments

A) $6,462.20 B) $7,027.58 C) $5,928.00 D) $6,477.79

Find the monthly house payment necessary to amortize the following loan.
18) In order to purchase a home, a family borrows $175,000 at 3.48% for 30 years. What is their monthly
payment? Round the answer to the nearest cent.

A) $783.88 B) $486.11 C) $757.10 D) $503.03

Solve the problem. Round to the nearest cent.

19) The monthly payments on a $100,000 loan at 6% annual interest are $599.55. How much of the first
monthly payment will go toward the principal?

A) $49.96 B) $74.76 C) $200.23 D) $99.55

Solve the problem.

20) Amanda wants to retire in 15 years. At that time she wants to be able to withdraw $2,500 at the end of
each month for 20 years. Assume that money earns 10% per year compounded monthly. To the nearest
dollar, what lump sum will Amanda need to deposit now so that she can start making her $2,500
withdrawals 15 years from now?

A) $58,165 B) $59,105 C) $62,017 D) $60,060

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Answer Key
Testname: CHAPTER 5 FORM C

1) D
2) A
3) C
4) A
5) C
6) A
7) B
8) C
9) B
10) C
11) B
12) C
13) B
14) C
15) C
16) A
17) B
18) A
19) D
20) A

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CHAPTER 5 FORM D

Name

Find the exact interest. Use 365 days in a year, and use the exact number of days in a month. Assume simple
interest and discount. Round to the nearest cent, if necessary.
1) $4,900 at 5% for 158 days

A) $10.75 B) $10.61 C) $106.05 D) $107.53

Find the future value of the loan. Assume simple interest. Round to the nearest cent, if necessary.
2) $600.00 loan at 8% for 7 months

A) $633.00 B) $1,028.00 C) $936.00 D) $628.00

The given Treasury bill was sold in August 2008. Find (i) the price of the T-bill, and (ii) the actual interest rate
paid by the Treasury. Round monetary amounts to the nearest cent and interest rates to the nearest thousandth.
Assume simple interest and discount.
3) Six-month $13,000 T-bill with discount rate 1.825%

A) (i) $12,881.38; (ii) About 1.842% B) (i) $12,857.65; (ii) About 2.214%
C) (i) $12,988.14; (ii) About 0.183% D) (i) $13,118.63; (ii) About 1.808%

Solve the problem. Assume 365 days in a year. Assume simple interest and discount.
4) Courtney Kendall needs $9,820.63 to pay for remodeling work. Her bank loans money at a discount rate
of 10% for 180 days. Find the face value of a loan so she will have $9,820.63.

A) $10,337.51 B) $10,330.06 C) $10,802.69 D) $9,820.63

Find the compound interest earned by the deposit. Round to the nearest cent.
5) $7,000 at 5% compounded semiannually for 12 years

A) $5,661.08 B) $2,414.22 C) $4,200.00 D) $5,570.99

Find the interest rate (with annual compounding) that makes the statement true. Round to the nearest
hundredth when necessary.
6) $426.00 grows to $864.18 in 20 years.

A) 2.70% B) 4.50% C) 3.60% D) 3.24%

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Find the APY corresponding to the given nominal rates.
7) 5.5% compounded quarterly

A) 5.24% B) 5.64% C) 5.61% D) 5.58%

Find the amount that should be invested now to accumulate the following amount, if the money is compounded
as indicated.
8) $5,100 at 7% compounded quarterly for 6 years

A) $3,363.13 B) $7,733.86 C) $1,736.87 D) $3,398.35

Solve the problem.

9) A bank gives you two options to choose from for your investments:
Option A: 6% annual interest rate compounded yearly; and
Option B: 5.9% annual interest rate compounded quarterly.
Decide which is the better investment at the end of 2 years.

A) Option A B) Option B C) A & B

Find the sum. Round to four decimal places.

10) 1 + 1.01 + 1.012 + 1.013 + . . . + 1.0111

A) 11.5668 B) 12.6825 C) 0.0631 D) 212.6825

Find the final amount (rounded to the nearest dollar) in this retirement account, in which the rate of return on
the account and the regular contribution change over time.
11) $500 per month invested at 4%, compounded monthly, for 20 years; then $1,000 per month invested at
8%, compounded monthly, for 20 years.

A) About $1,817,768 B) About $2,381,554

C) About $1,492,534 D) About $772,408

Find the interest rate needed for the sinking fund to reach the required amount. Assume that the compounding
period is the same as the payment period.
12) $60,000 to be accumulated in 10 years; annual payments of $3940. Round to the nearest hundredth.

A) 9.05% B) 9.11% C) 9.64% D) 9.83%

Find the payment that should be used for the annuity due whose future value is given. Assume that the
compounding period is the same as the payment period.
13) $3,000; quarterly payments for 6 years; interest rate 3.6%.

A) $77.98 B) $20.33 C) $31.91 D) $111.54

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Solve the problem.
14) Soylent Green Landscaping wants to build a $250,000 greenhouse in 3 years. The company sets up a
sinking fund with payments made quarterly. Find the payment into this fund if the money earns 5%
compounded quarterly.

A) $19,439.58 B) $18,513.88 C) $20,833.33 D) $20,411.56

Find the amount necessary to fund the given withdrawals.

15) Semiannual withdrawals of $1,000 for 8 years; interest rate is 4.6% compounded semiannually.

A) $13,985.41 B) $13,260.52 C) $13,834.86 D) $14,789.38

Find the lump sum deposited today that will yield the same total amount as this yearly payment made at the end
of each year for 20 years at the given interest rate, compounded annually.
16) $50,000 at 4%

A) $652,335.66 B) $653,381.07 C) $706,696.97 D) $679,516.32

Find the payment necessary to amortize the loan.

17) $5,000; 7% compounded semiannually; 10 semiannual payments

A) $568.41 B) $567.78 C) $601.21 D) $535.61

Find the monthly house payment necessary to amortize the following loan.
18) In order to purchase a home, a family borrows $125,000 at 3.6% for 15 years. What is their monthly
payment?

A) $867.99 B) $719.44 C) $899.75 D) $932.69

Solve the problem. Round to the nearest cent.

19) The monthly payments on a $49,900 loan at 7.2% annual interest are $454.11. How much of the first
monthly payment will go toward interest?

A) $154.71 B) $32.70 C) $114.84 D) $299.40

Solve the problem.

20) Find the least amount that could be deposited in a bank account today at 12% compounded quarterly to
allow $650 withdrawals at the end of each quarter for 9 years? Round to the nearest dollar.

A) $13,967 B) $14,191 C) $29,142 D) $14,409

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Answer Key
Testname: CHAPTER 5 FORM D

1) C
2) D
3) A
4) B
5) A
6) C
7) C
8) A
9) B
10) B
11) C
12) A
13) D
14) A
15) B
16) D
17) C
18) C
19) D
20) B

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