## Section 2.6 Chapter 2 Review

### Exercises Review Exercises

###### Exercise Group.

###### 1.

If you deposit $1,525 in an account at 5.6% APR for fourteen years, how much will you have in the account and how much interest did you earn after 14 years if:

The interest is compounded using simple interest.

The interest is compounded quarterly.

The interest is compounded weekly.

The interest is compounded continuously.

###### 2.

Alicia takes out a $2,300 loan that charges 15% APR simple interest. How much will she pay if she has the loan for 3 years? How much interest did she pay?

###### 3.

Devon invests $25,000 into an account for 15 years. He earns 6.5% interest compounded quarterly. What is the future value and how much interest did he earn?

###### 4.

The current inflation rate is 2.92%. If this continues for the next 10 years find the cost of the following items in the year 2029. Note: Inflation is Continuous Compound Interest.

Gas Average: $3.49

Dozen Eggs: $1.99

Bread: $3.29

Basic Monthly Cell Phone bill: $79.99

Average cost of downloading a song: $1.99

###### 5.

You are purchasing new furniture that costs $3500. You are required to make a down payment of $350. The loan will be a simple interest at 13% APR and the length of the loan will be 28 months. What is your monthly payment and how much did you pay back?

###### 6.

Tom has misplaced the sales contract for his car and cannot remember the amount he originally financed. He does know that the interest rate was 9.6% APR for 60 months and the simple interest loan required a total of 60 payments at $254.23. What is the amount of money that Tom borrowed?

###### Exercise Group.

###### 7.

For each find the Future Value, the total amount deposited, and the interest earned.

Regular Deposit $350, Compounded Monthly, 6.5% APR for 25 years

Regular Deposit $500, Compounded Quarterly, 6.5% APR for 15 years

Regular Deposit $75, Compounded Weekly, 4.5% APR for 30 years

###### Exercise Group.

###### 8.

For each house find the monthly payment for a 30 year loan and 5% APR. Find the amount of interest you pay on each loan.

House 1: John’s Landing Townhouse: $299,900

House 2: Gresham 4 bedroom House: $389,900

###### Exercise Group.

###### 9.

Find the net monthly cash flow (1 month = 4 weeks)

Income: | Expense |
---|---|

Job Income: $475 per week | Rent: $650 per month |

Loan: $2500 per term. (10 weeks) | Groceries: $55 per week |

Tuition and fees: $3000 per term | |

Books: $255 per term | |

Miscellaneous: $75 per week |

###### 10.

Pat loves painting. With tax, the total spent is about $46 each month on supplies. Once a week (52 weeks per year) the art class cost Pat $15.75. How much is Pat spending on painting in a year?

###### Exercise Group.

###### 11.

If you are in the 12% tax bracket and can take a $1,000 deduction, how much will your tax bill decrease by?

###### 12.

If you are in the 12% tax bracket and can take a $1,000 credit, how much will your tax bill decrease by?

###### 13.

Amir’s made $43,000 in wages and $1000 in tips. He contributed $3,000 into his IRA account.

Find Amir’s Gross Income.

Find Amir’s Adjusted Gross Income (AGI).

###### 14.

Amir has $9,540 he could take in itemized deductions. The standard deduction for a single filer is $12,000.

Find Amir’s taxable income.

Use the 2018 tax table determine to determine how much Amir owes in taxes.

###### 15.

Amir can take a $1200 education credit and has had $2700 withheld from his paychecks.

Determine the amount Amir will owe or be refunded.