Question

On the next 10 questions, express monetary answers to the nearest whole dollar and percentages to the
nearest hundredth. Round months to the nearest tenth on Question 20.
For example, $1,234,567 (don’t include the cents) is appropriate for a monetary answer. For percentages, an
appropriate example is 12.34%. Do not round 12.34% to 12.3% or 12%

11. How much would be in your savings account in 10 years after depositing $4,375 today if the bank compounds
interest daily and pays 3.64 percent interest per year?

12. Suppose that you deposit $4,750.00 in an account at the beginning of the year and the account compounds
on an annual basis. If the balance of the account is $4,968.98 at the end of the year, what is the interest rate
on the account?

13. A $24,500 deposit earns 4.65 percent (compounded annually) for ten years. The account loses 1.75 percent
per year after that for three years, but then the account earns 2.95 percent for the last two years. What is the
value of the account at the end of that last year (fifteenth year after the initial deposit)?

14. Anne deposited $2,500 into an account that pays 4.85 percent annually. How much more interest would
Anne earn in 20 years if she did not withdraw the interest earned at the end of the year compared to the case
where Anne withdraws the interest at the end of each year?

Answer 1

Problem No	Variable	Answer
11	FV	$6,295.84
12	Rate	4.61%
13	Fv after 10 years	$38,597.43
	Fv after 13 years	$36,606.32
	Fv after 15 years	$38,797.95
14	FV when interest is not withdrawn	$6,446.27
	Interest when there is no withdrawal	$3,946.27
	Interest when there is withdrawal	2425
	Additional Interest	$1,521.27

WORKINGS