MA 111 - Contemporary MathematicsTest 2March 8, 2006Name:Score: /100 Points1Instructions:• 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 andother 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 notwant graded.• You must show all your work to recieve full credit unless otherwisestated.21. (a) Your salary went from $1, 500 a month to $2, 125 a month. Determine thepercent increase in your salary. (7 points)(b) Suppose you take out a loan for $250, 000 and the lender charges you 3points. If you wish to make a down payment of 10% of the loan, find howmuch your down payment plus your points w ill cost you at the beginingof the loan? (8 points)32. Samantha deposits $3, 000 into a savings account earning simple interest at7.3% annually. She leaves the money in the bank for 2 years.(a) How much money, including both principal and interest, can she withdrawat the and of the time? (5 points)(b) Also, how much interest did she earn on the account? (5 points)43. Marc’s takes out a loan of $5, 000 to build a porch on his house. The bankcharges Marc an annual interest rate of 13.5% compounded monthly for fouryears 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? (5points)(c) What is the remaining balance of Marc’s loan after 1 year of paying $250payments? (5 points)(d) How much will the accelerated payments save Marc over the life of theloan? (5 points)54. 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%. Thenduring the Fourth of July sale, it was marked down an additional 37%. Whatwas the final price of the physics book? (20 points)65. You decide you need a new car to cruise around around Lexington so you setaside $300 each month into an account earning 7% annual interest, comp oundedmonthly. How long will it take you to accumulate the necessary $62, 000 in orderto buy the car? (20 points)76. At age 75, Nicole remembers that she opened a bank account while in collegeat age 20. The banks tells her the account is now worth $50, 000 and thatshe had originally deposited $200 into the account. If interest on the accountwas compounded semi-monthly and assuming the rate never changed, find theannual interest rate of the account. (20 points)87. Extra Credit: Derive the formula that determines the amount of money in acompound interest account after t years. (10
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