MA 111 Contemporary Mathematics Test 2 March 8 2006 Name Score 100 Points 1 Instructions You may not use any outside assistance on this exam You may not use books notebooks other people s exams or any other materials to cheat on this exam You may use a graphing calculator on this exam The use of electronic equipment such as mp3 players ipods cell phones and other electronic devices besides your calculator during the exam is prohibited If you are caught cheating on the exam you will be given a 0 for a grade Write clearly during the exam and fully erase or mark out anything you do not want graded You must show all your work to recieve full credit unless otherwise stated 2 1 a Your salary went from 1 500 a month to 2 125 a month Determine the percent increase in your salary 7 points b Suppose you take out a loan for 250 000 and the lender charges you 3 points If you wish to make a down payment of 10 of the loan find how much your down payment plus your points will cost you at the begining of the loan 8 points 3 2 Samantha deposits 3 000 into a savings account earning simple interest at 7 3 annually She leaves the money in the bank for 2 years a How much money including both principal and interest can she withdraw at the and of the time 5 points b Also how much interest did she earn on the account 5 points 4 3 Marc s takes out a loan of 5 000 to build a porch on his house The bank charges Marc an annual interest rate of 13 5 compounded monthly for four years and Marc plans to pay 250 per month a How much were the original loan payments 5 points b How long will it take Marc to pay off the loan with his 250 payments 5 points c What is the remaining balance of Marc s loan after 1 year of paying 250 payments 5 points d How much will the accelerated payments save Marc over the life of the loan 5 points 5 4 The Overpriced Paper bookstore had a physics book with retail price 137 However once put on the sale rack the book was marked down by 15 Then during the Fourth of July sale it was marked down an additional 37 What was the final price of the physics book 20 points 6 5 You decide you need a new car to cruise around around Lexington so you set aside 300 each month into an account earning 7 annual interest compounded monthly How long will it take you to accumulate the necessary 62 000 in order to buy the car 20 points 7 6 At age 75 Nicole remembers that she opened a bank account while in college at age 20 The banks tells her the account is now worth 50 000 and that she had originally deposited 200 into the account If interest on the account was compounded semi monthly and assuming the rate never changed find the annual interest rate of the account 20 points 8 7 Extra Credit Derive the formula that determines the amount of money in a compound interest account after t years 10 points 9
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