Math OER
Week 2 Homework, Part A

1. Tom buys a painting for $100. His friend, Eric, buys a painting for $200. Both paintings increasse in value by $30. What is the percent increase for each?

Tom 333%, Eric 666% Tom 43%, Eric 18%
Tom 233%, Eric 566% Tom 30%, Eric 15%

2. A business buys a copy machine for $2,500 by borrowing that $2,500 with a loan of 15% simple interest for three years and three months. What is the total cost (the copy machine plus the loan's interest)?

$1,218.75 $1,237.50 $3,718.75 $3,737.50

3. How much was borrowed at 120% annual simple interest for two weeks if the interest was $16.15?

$6.73 $67.30 $80.75 $349.92

4. An annual compound interest rate of 18% compounded monthly means that each monthly payout will have a monthly interest rate of

0.6% 1.5% 6% 18%

5. Find the number of compounding periods in 7 years and 6 months (ignore leap years).

28 quarters, 84 months, or 390 weeks
28 quarters, 84 months, or 420 weeks
30 quarters, 90 months, or 390 weeks
30 quarters, 90 months, or 420 weeks

6. When Huey, Dewey, and Louie entered kindergarten their uncled started a college account for them. Each account had $5,000. That one deposit grew at 9% annual interest for 13 years. For Huey the interest was compounded weekly. For Dewey the interest was compounded monthly. For Louie the interest was compounded annually. How much was each account worth at the end of the 13 years?

Huey has the most with $53.89 more than the second-place sibling
Dewey has the most with $710.76 more than the second-place sibling
Louie has the most with $382.33 more than the second-place sibling
Louie has the most with $764.66 more than the second-place sibling

7. Mr. Largo gives his 20-year-old sibling a $100 wedding present. The sibling invests it at 11% annual compound interest for 30 years. Then the sibling adds an extra $10,000, and moves the combined funds in a different investment that earns 4% annual compound interest for 10 years. What is the final value, when the sibling is 60 years old? (Hint: If no time period for payouts is mentioned, it has annual compounding.)

$2,289.23 $3,388.62 $18,191.06 $34,894.30

8. A credit card has an 18% annual interest rate. Payouts happen monthly. The loan uses compound interest. What is the annual effective interest rate?

1.5% 18% 19.5% 19.6%

9. If $3,865 is invested with 9% annual compound interest for 40 years, how much will it grow to be worth?

$13,914
$110,871
$121,397
$139,565

10. Continuing the previous problem for no currently apparent reason, how much less than $176,696 is your answer?

$37,131 less than $176,696
$55,299 less than $176,696
$65,825 less than $176,696
$162,782 less than $176,696

Short Answer Question: What is broken about using the "one plus trick" as part of the simple interest formula? Gather your thoughts before composing your explanation by looking at the following example problem, a handwritten image below. Perhaps solve an additional problem both correctly and incorrectly to see what happens as it happens.