Consumer Mathematics Option 2

Question #1 – Simple Interest

Sarah borrowed $700 at a simple interest rate of 8%. At the end of the loan term she owed $812. What was the term of her loan?

Question #2 – Effective Annual Yield
Lisa has the opportunity to invest some of her money. She is trying to decide which type of investment would give her the best annual yield. Calculate the effective annual yield for both investments and decide which one is the best.

• 8% compounded monthly
• 8.25% compounded monthly

Question #3 – Annuity Earnings
Aubrey is saving money in an annuity and is earning 4% annual interest compounded semi-annually. If she deposits $600 in the account every six months for five years, what will the future value of her account equal? How much interest will she have earned?

Requirements:

• Show all your work so that the instructor clearly sees how you solved the problem.
• Make sure your final answer is clear and visible.

use attached document to submit answer