Math 160: Study Guide - Chapter 3

  1. Stock transaction problem. Compute the annual rate of return for the investment.
  2. Compound interest: Find the effective rate, find the amount, find the number of periods.
  3. Future value: Find the future value, find the future value, find the number of periods. For each of the future value problems, you then have to leave the money sit and just compound.
  4. Future value: Find the payment.
  5. Present value: Find the present value.
  6. Retirement: Find the present value needed to retire, then find the payment needed under a future value to reach that goal.
  7. Home loan: Find the down payment, how much is financed, what the monthly payment will be, what the total payments are, what the interest is, the remaining balance after a fixed time, the equity in the house after so many years, the time to pay off the loan if extra is paid, amount of money saved by paying extra.


Did I tell you to make sure the compounding period is the same as the deposit period for present value and future value problems? There's at least three problems on the test you will miss if you don't.