Finite Math A - Mrs. Leahy
Name___________________________________Pd:_____
Chapter 10 Test Study Guide/Practice Problems
The Mathematics of Money
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Express the percentage as a decimal.
1) 3.75%
A) 0.000375
B) 0.375
C) 0.0375
D) 3.75
E) 0.00375
2) 12.5%
A) 0.0125
B) 12.5
C) 1.25
D) 0.00125
E) 0.125
Solve the problem.
3) Enrollment at Kamp Krazy Kids is up 20% from last summer because more parents are working longer hours during
the day. If last year's total enrollment was 260, how many kids are expected to attend camp this summer?
A) 312
B) 280
C) 304
D) 298
E) 343
4) Kate decides to replace all the lights in her college apartment with energy saving light bulbs beginning this month. The
packaging says the new bulbs will use 75% less electricity. If Kate's electric bill last month was $7.29 from bulb use alone,
project how much Kate's electric bill will be this month for bulb use.
A) $2.55
B) $1.82
C) $5.47
D) $0.80
E) $6.54
5) Since the enactment of a smoking ban in a particular city, the number of smokers has slowly declined. Statistics show
that the number of smokers in this city has decreased for four consecutive months by 3%, 2%, 5% and 2%. What was the
overall percentage decrease in the number of smokers during this four month period?
A) 11.5%
B) 3%
C) 88.5%
D) 12%
E) 12.5%
6) The groundhog population of Punxsutawny, Pennsylvania is closely monitored each year. Two years ago the
population decreased by 12%. Last year the number of groundhogs increased by 6%. This year the population also
increased by 9%. What was the percentage increase/decrease of groundhogs over these three years? Round your answer
to the nearest tenth of a percentage point.
A) 1.7% increase
B) 4.3% decrease
C) 29.4% increase
D) 24.8% decrease
E) 9.2% increase
7) Devin purchased a $3500 bond paying 4.5% annual simple interest after graduating from college. It is now 35 years
later and he decides to cash in the bond. What is the value of this bond now? Round your answer to the nearest dollar.
A) $3537
B) $8632
C) $5513
D) $16,336
E) $9013
8) A savings bond currently worth $7600 collects 5.5% annual simple interest each year. If the bond was purchased seven
years ago, how much was it bought for?
A) $1381.81
B) $4903.23
C) $5487.36
D) $2673.21
E) $11,780.00
9) A loan worth $4500 collects simple interest each year for 12 years. At the end of that time, a total of $7605 is paid back.
Determine the APR for this loan.
A) 4.25%
B) 5%
C) 4.5%
D) 5.75%
E) 5.5%
10) A bank offers a 6% annual interest rate compounded monthly. The periodic interest rate is
A) 0.06%.
B) 0.005%.
C) 0.05%.
D) 0.5%.
E) none of these
11) A bank offers a 7.75% annual interest rate compounded daily. The periodic interest rate is
A) 0.00785%.
B) 0.0212%.
C) 0.00775%.
D) 0.00212%.
E) none of these
12) Suppose that $543 is invested in a savings account with an APR of 8.75% compounded annually. What is the future
value of the account in 4 years?
A) $543(0.875)4
B) $543(8.75)4
C) $543(0.0875)4
D) $543(1.0875)4
E) none of these
13) Suppose that $874 is invested in a savings account with an APR of 9% compounded annually. What is the future value
of the account in 4 years?
A) $874(0.09)4
B) $874(0.9)4
C) $874(9)4
D) $874(1.09)4
E) none of these
14) Suppose that $3500 is invested in a savings account with an APR of 8.25%. What is the future value of the account in 8
years?
A) $1320
B) $6579
C) $6599
D) $180
E) $5631
15) Suppose that $823.25 is invested in a savings account with an APR of 12% compounded monthly. What is the future
value of the account in 5 years?
A) $823.25(1.12)5
B) $823.25(1.12)60
C) $823.25
D) $823.25
16) A bank offers a 6% annual interest rate compounded monthly. The APY is approximately
A) 6.27%.
B) 6%.
C) 5.75%.
D) 6.17%.
E) none of these
E) none of these
17) A bank offers a 6.35% annual interest rate compounded daily. The APY is approximately
A) 7.02%.
B) 6.82%.
C) 5.36%.
D) 6.56%.
E) none of these
18) A bank offers a 7.3% annual interest rate compounded daily. The APY is approximately
A) 10.72%.
B) 8.03%.
C) 13.23%.
D) 7.57%.
E) none of these
19) Which of the following options is the best option to choose to invest your money in:
I. 7% APR compounded yearly
II. 6.25% APR compounded monthly
III. 5.75% APR compounded continuously?
A) II
B) none of these
C) III
D) I
E) I and III
Consider a geometric sequence that has initial term G0 = 75 and a common ratio c = 2.2.
20) Find G1.
A) 165
B) 155
C) 150
D) 144
E) 35
21) Find G4.
A) 1650.52
B) 7522.30
C) 798.60
D) 2250.32
E) 1756.92
The first two terms of a geometric sequence are G0= 1260 and G1 = 882.
22) Find the common ratio c.
A) 1.26
B) 1.43
C) 0.70
D) 1.70
E) 1.80
23) Find G3.
A) 302.526
B) 432.18
C) 302.526
D) 5040.738
E) 4333.266
As summer approaches the size of Matt's wardrobe increases weekly by 6%. Assume that Matt's wardrobe contained
112 pieces in March, and let
denote the number of pieces in his wardrobe N months after March.
24) How many pieces does Matt have in his wardrobe in July (N = 5)? Round to the nearest whole number.
A) 96
B) 150
C) 151
D) none of these
E) 124
Recent studies show that the number of three-legged frogs in a particular area is increasing due to exposure to
chemical pollutants. The first set of data reported in 2000 estimates a population of 5000 three-legged frogs.
Statistics show an annual increase of 15%. Let
denote the number of three-legged frogs projected to inhabit this
area in the year 2000 + N.
25) How many three-legged frogs are projected to inhabit this area by 2009? Round to the nearest whole number.
A) 10,000
B) 17,589
C) 6750
D) 15,295
E) 7532
SOLUTIONS
1) C
2) E
3) A
4) B
5) A
6) A
7) E
8) C
9) D
10) D
11) B
12) D
13) D
14) C
15) C
16) D
17) D
18) D
19) D
20) A
21) E
22) C
23) B
24) B
25) B
Percent Increases and
Decreases
Geometric Sequence:
Starting Quantity:
the initial (starting) term
Percent of Change:
Increase (New Quantity)
x 

Q 1 

 100 
the common ratio
Recursive Formula:
Decrease (New Quantity)
x 

Q 1 

 100 
Explicit Formula:
Sum of the Terms in Geometric Sequence:
Percent Change (find the actual
percentage)
 cN 1 

 c 1 
Sum = P 
P = principal
F = future value
r = annual interest rate
m = number times compounded per year
t = time of investment, in years
T = total compounding periods =
p = periodic interest rate =
Simple Interest Formula
Compound Interest Formula
Periodic:
Continuously:
Payment for an Installment Loan
Payment 
P p
P p
=
1  (1  p)T 1  1
(1  p)T
Annual Percentage Yield (APY)/Effective
Rate