Mathematics with Business Applications

Chapter 12:

Practice Test


1.	Ray Vaughn invests $1,500 in a 1-year certificate of deposit that earns interest at an annual rate of 7 percent compounded monthly. The amount per $1.00 is 1.072290. How much interest will he earn at the end of one year?
		A)	$60.00
		B)	$105.00
		C)	$108.44
		D)	$1,608.44


2.	Tina Mendoza invested $2,000 in a certificate of deposit for 3 years. The certificate earns interest at an annual rate of 7.50 percent compounded quarterly. The amount per $1.00 is 1.079781. What is the effective annual yield to the nearest thousandth of a percent?
		A)	0.079%
		B)	0.798%
		C)	7.978%
		D)	8.098%


3.	Mary Beth Healey purchased 50 shares of stock at $23.50 per share. Her Internet online broker charged her a $14.95 commission. What is the total amount that she paid for the stock?
		A)	$427.50
		B)	$747.50
		C)	$1,175.00
		D)	$1,189.95


4.	Geoffrey Richards bought 100 shares of stock at $32 per share. The company paid annual dividends of $0.74 per share. What is the annual yield to the nearest hundredth of a percent?
		A)	2.31%
		B)	3.20%
		C)	4.32%
		D)	7.40%


5.	Aisha Knox paid a total of $1,500 for 75 shares of stock. He sold the stock for $22.50 a share and paid a sales commission of $49.00. What is the profit or loss from the sale?
		A)	$138.50 loss
		B)	$138.50 profit
		C)	$236.50 loss
		D)	$236.50 profit


6.	Claire Hofbauer purchased a $1,500 bond at the quoted price of 87½. The bond paid interest at a rate of 5.5 percent. Find the annual yield to the nearest hundredth of a percent.
		A)	5.50%
		B)	6.29%
		C)	15.91%
		D)	17.14%


7.	Gary Andreassen invests $2,000 in a 1-year certificate of deposit that earns interest at an annual rate of 8 percent compounded monthly. The amount per $1.00 is 1.082999. How much interest will he earn at the end of one year?
		A)	$103.97
		B)	$160.00
		C)	$166.00
		D)	$180.50


8.	Elizabeth Houston purchased 125 shares of stock at $18.50 per share. Her Internet online broker charged her a $19.95 commission. What is the total amount that she paid for the stock?
		A)	$2,292.55
		B)	$2,332.45
		C)	$2,493.75
		D)	$2,512.25


9.	Jamal Anderson bought 50 shares of stock at $28 per share. The company paid annual dividends of $0.52 per share. What is the annual yield to the nearest hundredth of a percent?
		A)	0.54%
		B)	1.04%
		C)	1.79%
		D)	1.86%


10.	Nelson Connors purchased a $2,500 bond at the quoted price of 89½. The bond paid interest at a rate of 6.5 percent. Find the annual yield to the nearest hundredth of a percent.
		A)	7.26%
		B)	7.78%
		C)	8.45%
		D)	10.50%