Chapter 8: Problem 61
Describe how to express a percent as a decimal number and give an example.
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Chapter 8: Problem 61
Describe how to express a percent as a decimal number and give an example.
These are the key concepts you need to understand to accurately answer the question.
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Suppose that at age 25 , you decide to save for retirement by depositing \(\$ 50\) at the end of each month in an IRA that pays \(5.5 \%\) compounded monthly. a. How much will you have from the IRA when you retire at age \(65 ?\) b. Find the interest.
a. Suppose that between the ages of 22 and 40 , you contribute \(\$ 3000\) per year to a \(401(\mathrm{k})\) and your employer contributes \(\$ 1500\) per year on your behalf. The interest rate is \(8.3 \%\) compounded annually. What is the value of the \(401(\mathrm{k})\), rounded to the nearest dollar, after 18 years? b. Suppose that after 18 years of working for this firm, you move on to a new job. However, you keep your accumulated retirement funds in the \(401(\mathrm{k})\). How much money, to the nearest dollar, will you have in the plan when you reach age \(65 ?\) c. What is the difference between the amount of money you will have accumulated in the \(401(\mathrm{k})\) and the amount you contributed to the plan?
In Exercises 1-10, \((n)\) a. Find the value of each annuity. Round to the nearest dollar. b. Find the interest. $$ \begin{array}{|l|l|l|} \hline \text { Periodic Deposit } & \text { Rate } & \text { Time } \\ \hline \begin{array}{l} \$ 2000 \text { at the end of } \\ \text { each year } \end{array} & \begin{array}{l} 5 \% \text { compounded } \\ \text { annually } \end{array} & 20 \text { years } \\ \hline \end{array} $$
Exercises 3-4 involve credit cards that calculate interest using the average daily balance method. The monthly interest rate is \(1.2 \%\) of the average daily balance. Each exercise shows transactions that occurred during the June 1 -June 30 billing period. In each exercise, a. Find the average daily balance for the billing period. Round to the nearest cent. b. Find the interest to be paid on July 1, the next billing date. Round to the nearest cent. c. Find the balance due on July 1 . d. This credit card requires a \(\$ 30\) minimum monthly payment if the balance due at the end of the billing period is less than \(\$ 400\). Otherwise, the minimum monthly payment is \(\frac{1}{25}\) of the balance due at the end of the billing period, rounded up to the nearest whole dollar. What is the minimum monthly payment due by July 9? $$ \begin{array}{|l|c|} \hline \text { Transaction Description } & \text { Transaction Amount } \\ \hline \text { Previous balance, } \$ 2653.48 & \\ \hline \text { June } 1 \quad \text { Billing date } & \\ \hline \text { June } 6 \quad \text { Payment } & \$ 1000.00 \text { credit } \\\ \hline \text { June } 8 \quad \text { Charge: Gas } & \$ 36.25 \\ \hline \end{array} $$$$ \begin{array}{|ll|l|} \hline \text { June } 9 & \text { Charge: Groceries } & \$ 138.43 \\ \hline \text { June 17 } & \begin{array}{l} \text { Charge: Gas } \\ \text { Charge: Groceries } \end{array} & \$ 42.36 \\ \hline \text { June } 27 & \text { Charge: Clothing } & \$ 214.83 \\ \hline \text { June } 30 & \text { End of billing period } & \\ \hline \text { Payment } & \text { Due Date: July } 9 & \\ \hline \end{array} $$
Suppose your credit card has a balance of \(\$ 3600\) and an annual interest rate of \(16.5 \%\). You decide to pay off the balance over two years. If there are no further purchases charged to the card, a. How much must you pay each month? b. How much total interest will you pay?
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