Math 1332 Math 1332 Math 1332 Math 1332 Test 2 Test 2 Test 2 Test 2 _REVIEW _REVIEW _REVIEW _REVIEW Chapters 8 & 11 (Partial 11)_Blitzer Chapters 8 & 11 (Partial 11)_Blitzer Chapters 8 & 11 (Partial 11)_Blitzer Chapters 8 & 11 (Partial 11)_Blitzer Name___________________________________ ----------------------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------- MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Express the percent as a decimal. 1) 9% A) 9 B) 0.9 C) 90 D) 0.09 1) Solve the problem. 2) 364.9 is 10 1 4 % of what number? A) 35,600 B) 35.6 C) 3560 D) 356 2) Write the decimal as a percent. 3) 0.00577 A) 0.2885% B) 0.000577% C) 0.577% D) 0.0577% 3) Express the percent as a decimal. 4) 31% A) 0.31 B) 0.2 C) 0.031 D) 3.1 4) Write the decimal as a percent. 5) 38 A) 0.38% B) 1900% C) 3800% D) 3.8% 5) Page 1
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Math 1332 Test 2 REVIEW Chapters 8 & 11 (Partial 11) Blitzer
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Math 1332Math 1332Math 1332Math 1332 Test 2 Test 2 Test 2 Test 2 _REVIEW _REVIEW _REVIEW _REVIEW
Use the stock table for Icarus to answer the following questions.
a. What were the high and low prices for the last 52 weeks?
b. If you owned 3000 shares of Icarus stock last year, what is the dollar amount of the dividend
you received?
c. What is the annual return for dividends alone?
d. How many shares of Icarus were traded yesterday?
e. What were the high and low prices for Icarus shares yesterday?
f. What was the price at which Icarus traded when the stock exchange closed yesterday?
g. What does ... in the net change column mean?
h. Compute Icarus's annual earnings per share using
Annual earnings per share = Yesterday's closing price per share
PE ratio .
25)
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Use PMT =
Pr
n
1 - 1 + r
n
-nt. Round to the nearest dollar.
26) Suppose that you decide to buy a car for $25,792, including taxes and license fees. You saved $5000
for a down payment and can get a five-year loan at 6.57%. Find the monthly payment and the total
interest for the loan.
A) $408; $15,388 B) $603; $15,388 C) $505; $4508 D) $408; $3688
26)
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The table shows the expense of operating and owning four selected cars, by average costs per mile. Use the appropriate
information in the table to solve the problem.
27) Average Annual Costs of Owning and Operating a Car for Selected Cars
Average Costs Per Mile
Model Operating Ownership Total
Car A $0.22 $0.78 $1.00
Car B $0.14 $0.55 $0.69
Car C $0.28 $0.32 $0.60
Car D $0.17 $0.68 $0.85
If you drive 30,000 miles per year, by how much does the total annual expense for Car A exceed that
of Car C over five years?
A) $240,000 B) $48,000 C) $60,000 D) $12,000
27)
Determine whether the statement is true or false.
28) If you have to make a fixed payment based on the car's residual value, then you have made an
open-end lease agreement.
A) True B) False
28)
Use A =
P 1 + r
n
nt - 1
r
n
. Round all computations to the nearest dollar.
29) Suppose that you drive 40,000 miles per year and gas averages $4 per gallon.
(i) What will you save in annual fuel expenses by owning a hybrid car averaging 40 miles per gallon
rather than an SUV averaging 20 miles per gallon?
(ii) If you deposit your monthly fuel savings at the end of each month into an annuity that pays 5.6%
compounded monthly, how much will you have saved at the end of seven years?
A) (i) $4100;
(ii) $35,040
B) (i) $3900;
(ii) $33,330
C) (i) $5000;
(ii) $42,731
D) (i) $4000;
(ii) $34,185
29)
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The table shows the expense of operating and owning four selected cars, by average costs per mile. Use the appropriate
information in the table to solve the problem.
30) Average Annual Costs of Owning and Operating a Car for Selected Cars
Average Costs Per Mile
Model Operating Ownership Total
Car A $0.21 $0.78 $0.99
Car B $0.12 $0.58 $0.70
Car C $0.26 $0.32 $0.58
Car D $0.19 $0.64 $0.83
(a) If you drive 20,000 miles per year, what is the total annual expense for Car B?
(b) If the total annual expense for Car B is deposited at the end of each year into an IRA paying 8.9%
compounded yearly, how much will be saved at the end of five years? Round your answer to the
nearest dollar, if necessary.
A) (a) $14,000; (b) $13,622,059 B) (a) $28,571; (b) $363,626
C) (a) $28,571; (b) $1,053,171 D) (a) $14,000; (b) $83,619
30)
Use PMT =
Pr
n
1 - 1 + r
n
-nt to determine the regular payment amount, rounded to the nearest dollar.
31) The price of a home is $210,000. The bank requires a 15% down payment and one point at the time
of closing. The cost of the home is financed with a 30-year fixed-rate mortgage at 6.5%.
a. Find the required down payment.
b. Find the amount of the mortgage.
c. How much must be paid for the one point at closing?
d. Find the total cost of interest over 30 years, to the nearest dollar.
A) a. down payment: $31,500
b. amount of mortgage: $178,500
c. points paid at closing: $2100
d. total cost of interest over 30 years: $227,667
B) a. down payment: $31,500
b. amount of mortgage: $178,500
c. points paid at closing: $1785
d. total cost of interest over 30 years: $406,167
C) a. down payment: $31,500
b. amount of mortgage: $178,500
c. points paid at closing: $2100
d. total cost of interest over 30 years: $196,167
D) a. down payment: $31,500
b. amount of mortgage: $178,500
c. points paid at closing: $1785
d. total cost of interest over 30 years: $227,667
31)
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Determine whether the statement is true or false.
32) Owning a home provides significant tax advantages, including deduction of mortgage interest and
property taxes.
A) True B) False
32)
Use PMT =
Pr
n
1 - 1 + r
n
-nt to determine the regular payment amount, rounded to the nearest dollar.
33) In terms of paying less in interest over the full term of the mortgage, which is more economical for
a $250,000 mortgage : 30-year fixed at 7.00% or 20-year fixed at 6.50%?
A) The 20-year fixed rate at at 6.50% is more economical.
B) They are the same.
C) The 30-year fixed rate at at 7.00% is more economical.
33)
Use the following advice from most financial advisors to solve the problem.∙∙∙∙ Spend no more than 28% of your gross monthly income for your mortgage payment.∙∙∙∙ Spend no more than 36% of your gross monthly income for your total monthly debt.
Round all calculations to the nearest dollar, if necessary.
34) Suppose that your gross annual income is $60,000.
(a) What is the maximum amount you should spend each month on a mortgage payment?
(b) What is the maximum amount you should spend each month for total credit obligations?
(c) If your monthly mortgage payment is 75% of the maximum amount you can afford, what is the
maximum amount you should spend each month for all other debt?
A) (a) $1400; (b) $1800; (c) $50 B) (a) $16,800; (b) $21,600; (c) $9000