1. An investor deposits $400 into a bank account that earns anannual interest rate of 8%. Based on this information, how muchinterest will he earn during the second year alone? (choose a orb)
a. 32 b. 34.56
2. A monthly interest rate of 1% is a compounded annual rateof:
a. 12.5 b. 12.68
3. Suppose that a family wants to save money for a child'scollege tuition. The child will be attending college in 12 years.The cost of college education today is $120,000. If the interestrate is 6% and the inflation rate is 2%, then about how much doesthis family need to deposit in their savings account today?
a. 75633Â Â b. 74420
4. Sharon deposits $150.00 in her savings account at the bank.At the end of one year she has $156.38. What was the interest ratethat Sharon earned?
a. 4.3 b. 4.25
