chapter 5

chapter 5
multiple choice

1. Johnny deposits 9,999 in a saving account paying 6.5% compounded monthly. how much will he have after 7 years?
A) 22,265
B) 15,665
C) 15,740
D) 14,740

Answer C

2. What did Albert Einstein say was the single most important discovery in mathematics?
A) theory of relatively
B) compounding interest
C) time value of money
D) Pathagrium therom

Answer B

3. Jan wants to open an IRA account depositing 5,000 at the beginning of each year earning 9% interest until she retires in 41 years. How much money will have accumulated?
A) 2,012,640
B) 1,999,999
C) 1,300,061
D) 1,846,459

Answer A

T/F

1) The top dollar amount allowed to be deposited into an IRA a year is 7,500.

Answer F

2) An annuity is characterized by solely a yearly payment over its life cycle.

Answer F

3) Upkeep is necessary for any property investment.

Answer T

4) If an annual payment is broken down monthly, you always divide the interest by 12.

Answer T

5) Amortization is the systematic increase of debt through a series of scheduled principle payments that lead to an increase in the loan amount.

Answer F