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Financial Algebra Advanced Algebra with Financial Applications 2nd Edition Robert Gerver Richard J Sgroi Test Bank
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Chapter_02___Banking_Services_
1. Aaron wants to know how much he needs to save each month in his savings account to have a certain amount in the future. He should use the formula for present value of a periodic deposit investment.

2. Interest compounded semiannually is compounded four times a year.

3. To reconcile a check register means to match all the entries in the register with the statement received from the bank and correct any discrepancies.

4. Maxine deposited $1,000 into an account that pays 4.5% interest, compounded daily. At the end of six months, she has earned $12 in interest.

5. The Federal Deposit Insurance Corporation insures bank accounts up to a particular amount. This means that if the bank fails, the money is guaranteed by the government.

6. Compound interest earns more than simple interest at the same interest rate because compounding pays interest on the interest earned.

7. Annual percent yield is higher than the annual percentage rate because APY takes into account the additional interest earned by compounding.

8. James and Terry open a savings account that has a 2.75% annual interest rate, compounded monthly. They deposit $500 into the account each month. How much will be in the account after 20 years?

9. Margarite wants to take a trip to Japan in 8 years. She knows she will need about $4,200. How much should she deposit into an account now that pays 3.5% interest, compounded daily, to meet her goal? Round to the nearest dollar.

10. Tamika opened a money market account that has a 4.25% annual interest rate, compounded annually. She deposits $1,750 into the account each year. How much interest will the account earn after 15 years?

11. Jackson deposited $5,000 at 3.8% interest, compounded continuously, when he was 18 years old. How much will be in the account when he is 40 years old if he made no other deposits or withdrawals?

12. Loretta deposits $350 every quarter into a savings account that earns 4.5% interest compounded quarterly. What is the balance after 7 years?

13. Bob and Kathy want to save a total of $500,000 for retirement. How much should they deposit monthly into an account that pays 3.9% interest, compounded monthly, to meet their goal in 24 years?

14. How much more would $1,000 earn in 5 years in an account compounded continuously than in an account compounded quarterly if the interest rate on both accounts is $3.7%?

15. LaToya has $113.94 in her checking account. During the week, she goes to an ATM and withdraws $40. She is charged a usage fee of $2.50. The following week she deposits her paycheck of $189.73. She writes two checks, one for $22.50 and the other for $70.18. What is the current balance in her checking account?

16. Conrad Savings Bank has a $50 overdraft fee. On Friday, Mr. McQuire deposited his paycheck of $468.92 for a total account balance of $712.34. The next morning, his wife wrote a check for $1,267.45 for a new refrigerator and stove. The check cleared the bank by the end of the day. What is the current balance in the McQuires’ account?

17. Erin has a balance of $1,150.34 in her check register. On her statement, the balance of her account is $844.93. Not reported on the bank statement are deposits of $125.56, $50, and $212.34. There are outstanding checks in the amount of $15 and $78.25 and an ATM withdrawal of $40. After Erin reconciles her check register with her statement, what entry does she need to make in her register?

18. Malcolm wants to make a deposit into an account that earns interest. He wants to be able to access the money on a limited basis. What type of account should he NOT consider?

19. What does the variable n represent in the formula below?

20. Amy opened a savings account with $1,750 she received for graduation. The account pays 4.3% simple interest. What is the balance after 6 months?

21. What is the interest earned on $20,000 for 5 years, at an interest rate of % compounded continuously?

22. Tammy sold a diamond ring for $10,000. She placed half of the money into a CD with a 3.9% interest rate compounded daily. She placed the other half into a CD with the same interest rate but compounded monthly. What is the difference in the interest earned on each amount after 4 years?

23. Huong deposits $2,000 into an account that earns 4.2% interest compounded daily. What is the annual percentage yield (APY) to the nearest hundredth of a percent?

24. Tyrone opens an account at the local bank by depositing $50 of his birthday money. He continues to deposit $50 each month for 5 years. If the account pays % interest compounded monthly, how much is in the account after 5 years?

25. Carmencita is 12 years old and she is saving for a car. She wants to have $5,000 by the time she is 16 years old. She opens a savings account with an APR of 3.9% compounded weekly. How much should she deposit into her account each week to meet her goal?

26. Sonja and Jake just got married. They received $4,500 in gift money and deposited it into a savings account that pays 2.85% simple interest. How much will they have in savings after 3 years?

27. Ashley and Dwayne are saving for retirement. Their goal is to have $250,000 in 15 years. They open up an account with an APR of 3.7% compounded monthly. How much should they deposit each month to meet their goal?

28. Edward wants to have $50,000 in 10 years for college. What single deposit would he need to make now into an account that pays 4.3% interest, compounded daily, to meet his goal?

29. Ron and Annie have $1,239.45 in their checking account. During the week, Annie goes to an ATM and withdraws $80. The following week Ron deposits his paycheck of $689.65. Annie then pays bills online in the amounts of: $212.80, $55, $49.76, and $110.35. What is the current balance in their checking account?

30. The Parsons have a balance of $3,664.47 in their check register. On their bank statement, the balance on the account is $2,346.89. Not reported on the bank statement are checks of $324.56, $25.50, $78.92, and $30.25. There are outstanding deposits in the amount of $500 and $1,456.81. There are three ATM withdrawals of $60 each. What do the Parsons need to do to reconcile their checkbook?

31. Annalise has an online checking account at Wells Fargo Bank. Her balance at the beginning of the month was $5,000.00. During the month, she made deposits totaling $5,478.42, was charged a maintenance fee of $18, and earned $1.87 in interest. Her balance at the end of the month was $4,187.93. Annalise grew concerned because she spent considerably more than she made during the month. How much did Annalise spend during the month?

32. Jericho wants to start saving to purchase a house. His goal is to save $95,000. If he deposits $56,000 into an account that pays 3.75% interest compounded daily, approximately how long will it take for his money to grow to the desired amount? Round your answer to the nearest tenth of a year.

33. Landry deposits $10,000 into an account that compounds interest continuously at a rate of 2.375%. How long will it take his money to grow to $11,000? Round your answer to the nearest tenth of a year.

34. Anne has opened up a systematic savings account into which she deposits $500 per month compounded monthly at a rate of 7.8%. How long will it take her to reach $500,000? Round your answer to the nearest tenth of a year.

35. Steve inherited $100,000 from his grandmother and deposited it into an account that compounds interest monthly at a rate of 4.9%. Each month, he withdraws $500 from the account. How long will it take him until the account has a balance of $0? Round your answer to the nearest tenth of a year.

36. Alesha wants to deposit $25,000 into an account that compounds interest. She hopes to have $40,000 in 7 years for a down payment on a house. What interest rate must she find in order to accomplish her goal? Round your answer to the nearest hundredth of a percent.

37. Rajesh invested $30,000 into an account that has a monthly rate of return of 0.79%. He has made arrangements to withdraw $250 automatically every month to pay off his 10year student loan. Will Rajesh have enough money in the account to cover all of the required loan payments? If so, how long can he continue to withdraw $250 each month to put toward a car payment? (Round to the nearest year.)

38. Curtis deposited $10,000 into an account that compounds interest annually at a rate of 5%. He wants to know how long it will take for his money to double but doesn’t have a calculator with logarithms. If he estimates the answer to his question using the Rule of 72s, and then later tries to verify his estimate with a better calculator, how many days will his estimate be off? Round your answer to the nearest day.

Chapter_04___Automobile_Ownership_
1. Property damage liability pays for injuries to a driver or their passengers caused by an uninsured or underinsured driver.

2. A car traveling at an average rate of 60 miles per hour will drive 270 miles in hours.

3. A car traveling on asphalt makes a sudden stop. The drag factor of the road is 0.7 and the brakes are operating at 90% efficiency. If the car leaves 4 distinct skid marks that are 60 feet long, then the car was traveling about 37 miles per hour.

4. In the boxandwhisker plot below, 50% of the data is between 30 and 70.

5. Cars with ABS or antilock brakes do not leave skid marks.

6. The fee that a driver pays to have automobile insurance is called a deductible.

7. Victor found 5 cars online that he will go to see. The prices of the cars are: $5,000; $4,500; $5,500; $3,999; and $4,999. The median car price is $4,799.60.

8. Pamela called nine repair shops for quotes for auto repairs. The prices are $139, $150, $345, $99, $167, $155, $140, $200, and $160. She calculates to find there are no outliers in the data.

9. Sarah bought a 7year old car for $10,500. When the car was new, it sold for $21,000. Therefore, the depreciation rate is 9.4%.

10. Yolanda wants to buy a fuelefficient car. She finds one that can travel 465 miles on one tank of gas. If the gas tank holds 15 gallons, the car gets about 41 miles per gallon.

11. Mrs. Beluga is driving on a snowcovered road with a drag factor of 0.2. She brakes suddenly for a deer. The tires leave a yaw mark with a 52foot chord and a middle ornate of 6 feet. What is the minimum speed she could have been going?

12. Tonya wants to place an advertisement in a local newspaper to sell her car. This piecewise function shows in the cost of the advertisement given that x equals the number of lines.
If the advertisement she wants to place will be 7 lines, how much will the paper charge her?

13. Larry’s car is worth $18,000 after 5 years. When the car was new, it sold for $24,000. What is the depreciation rate?

14. Marcia wants to get a new car stereo. She researches the cost with a variety of local car stereo installers and places her findings in a stemandleaf plot.
What is the median price?

15. Saheel has $20,000 property damage insurance and $5,000 comprehensive and collision insurance with a $500 deductible. One evening he slides on a patch of ice and hits a parked car, causing $4,500 worth of damage. The accident causes $1,750 of damage to his own car. How much will the insurance pay to fix both cars?

16. Tony shops around for a new muffler for his car and gets these estimates:
$145, $195, $150, $135, $169, $210, and $160. What are the four quartiles?

17. Cherie pays her car insurance monthly. Her annual premium is $984. Each month she is charged a $2 convenience fee. If her annual premium is divided equally into twelve monthly payments, how much is her monthly insurance payment?

18. Nathan wants to buy a car that costs $25,920. He has $3,000 as a down payment, and his payments will be $450 for 6 years. Through research he discovers that the value of the car will depreciate to a value of zero in 12 years. After how long will the expenses of the car be equal to the value of the car?

19. Craig is an accident reconstructionist. He arrives at an accident where there are 4 skid marks of different lengths. He finds their measures to be 85 ft, 92 ft, 88 ft, and 90 ft. It is an asphalt road with a drag factor of 0.8. Because he does not know the efficiency of the driver’s brakes, he assumes a brake efficiency of 80%. What is the minimum speed the driver could have been going?

20. Jeanette buys decals for her car from every state she visits. She made a list of the prices: $0.99, $5.10, $1.59, $1.99, $2.99, $0.80, $1.99, $1.99, $2.99, $1.59, $0.99, $3.49, and $0.80. Find the mean.

21. Jackson bought his first car. He went to an insurance office to get car insurance. Which of these types of insurance is the minimum required by law?

22. Gretchen has 50/100/50 liability insurance with a $500 deductible. While parked on the street, another car hits hers and then leaves the scene. There was $2,350 worth of damage. How much of the cost will her insurance pay?

23. Monte recorded the gas mileage, in miles per hour, of ten cars he is considering buying: 34, 27, 30, 24, 28, 31, 42, 30, 29, and 19. Put the data in a stemandleaf plot.

24. A car that Sophia wants to buy costs $21,000. She does research and finds that after 14 years the car depreciates to a value of zero. If the car depreciates in straight line form, write the straight line depreciation equation.

25. The Jacksons are taking a trip to Florida. Mr. Jackson knows that it is about 945 miles to their destination in Florida from their home in Ohio. He knows the average speed along his route will be 70 miles per hour. How long is the drive?

26. Aaron just bought a used car from his cousin for $3,500. When he changes the title and gets license plates, he is required to pay sales tax on the purchase price of the car. If the sales tax rate is %, how much sales tax does he pay?

27. Nina’s car exponentially depreciates at a rate of 7% per year. If Nina bought the car when it was 6 years old for $12,000, what was the original price of the car?

28. At the beginning of the week, Miguel’s odometer reads 87,845. At the end of the week, his odometer reads 88,033. How many miles did Miguel travel that week?

29. Maria works for an online auto trader. She makes a piecewise function to show the cost to place an online advertisement.
What is the cusp of the function?

30. Don buys a car valued at $25,000. When the car was new, it sold for $32,000. If the car depreciates exponentially at a rate of 7% per year, about how old is the car?

31. Benjamin currently pays $1,080 for his annual car insurance premium. He is in the Marines and will be deployed for the next 9 months. Since his car will be used much less, there is less risk for the insurance company and it offers him a 66% discount for his annual premium while on deployment. What is the amount he must save each month while on deployment to be able to pay for the discounted premium? When Benjamin returns, his premium will revert to the amount prior to deployment. What will his total premium for the year be?

32. The ratio of driving accidents that occur in Ohio while texting to those that are not a result of distracted driving is 7:2. If there were 972 accidents on Ohio roads, how many of them were due to texting?

33. Lawrence recently purchased a new car for $32,000. His research through Kelly Blue Book gave him a straightline depreciation model of y = −3,500x + 32,000. He hopes to sell the car after its value has decreased by 40%. Lawrence’s car payment is $630 per month for 60 months. How many months will it take before he tries to sell his car? If he is successful in selling the car for his goal price, what will the cost of the car have been per month after he pays off his loan?

34. Guy is being transferred from his home in Cincinnati, Ohio, to Sedona, Arizona. Google Maps tells him the driving distance is 1,725 miles. Guy’s research tells him that the speed limits will vary from 50 mi/hr to 75 mi/hr. If he is able to drive at a speed that is an average of these rates, how long will he be driving? Express your answer in hours and minutes. His company is paying for his moving expenses at a rate of $0.54/mile plus $50.00 per hour of driving time. How much will Guy’s company pay him for moving expenses?

35. Betsy has $15,000 worth of property damage insurance and $11,000 comprehensive and collision insurance with a $1,000 deductible. She had a tire blowout while driving and crashed into another vehicle before hitting a $5,540 fire hydrant. The accident caused $13,100 of damage to her car and $25,000 worth of damage to the other vehicle. How much of the damages will Betsy have to pay?

36. Zach uses his car for business and must keep accurate driving records so that his company will reimburse him for car expenses. When he started his trip, the odometer read 26,645. When he returned home, the odometer read 28,017. Zach’s car gets about 48 miles per gallon. If the tank was full at the beginning of the trip and it cost $62.28 to fill the tank at the end of the trip, what price did Zach pay per gallon?

37. How many feet and inches does a car traveling at 48 miles per hour cover in one second?

38. Kenya is driving on the highway at a speed of 75 mph. She sees an accident about 500 feet ahead and must come to a complete stop. Should Kenya swerve to avoid a collision with the accident ahead?

39. Djenabah has an insurance policy that requires her vehicle to be properly maintained. If she is in an accident, the insurance company will only pay if the brake efficiency is over 60%. Unfortunately, Djenabah was in an accident. She was driving at a speed of 32 mph on a road that had a drag factor of 0.81. The insurance company’s investigator measured three skid mark lengths of 70 ft, 72 ft, and 74 ft. Will the insurance company pay Djenabah’s claim?

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