Math 160: Study Guide - Chapter 3

1. Stock transaction problem. Find the amount of principal and commission at buying and selling time. Identify the duration of the investment and compute the annual rate of return for the investment.
2. Find out how much money will be saved if regular deposits are made.
3. Find out how much money will be saved after a certain time period using compound interest. Then find out how long it will take to accumulate a certain amount if regular deposits are made?
4. Retirement problem: Find the present value needed to retire, then find the payment needed under a future value to reach that goal.
5. Present value annuity problem. Find the monthly payment. Find the total amount of the payments.
6. Future value: Find the future value. Find the effective rate. Find the future value and then let that amount sit in the account as a compound interest problem. The last two parts are similar to the Bob (Jane) / John problem worked in class.
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, and the amount of money saved by paying extra.
8. Identify which type of problem (simple interest, compound interest, future value annuity, or present value annuity) is applicable. Do not attempt to answer the question, only identify the type of problem you would need to answer the question.

Notes:

• The test is individual, there are no groups allowed.
• Have you act together when you come in to take the test. Know your material. Go through and work the easiest problems first. Don't get bogged down on the first problem, it's one of the longer ones (work wise).
• Show enough work so that I can give partial credit if you're wrong. That may mean just writing down what your looking for and what you entered into the calculator for some problems, but if there's nothing but an answer, you better make sure it's right.
 # 1 2 3 4 5 6 7 8 Total Points 10 10 10 12 10 16 16 16 100