41. Theo needs $40,000 as a down payment for a house 6 years from now. He earns 3.5 percent on his savings. Theo can either deposit one lump sum today for this purpose or he can wait a year and deposit a lump sum. How much additional money must he deposit if he waits for one year rather than making the deposit today?
42. One year ago, you invested $1,800. Today it is worth $1,924.62. What rate of interest did you earn?
A. 6.59 percent
B. 6.67 percent
C. 6.88 percent
D. 6.92 percent
E. 7.01 percent
43. According to the Rule of 72, you can do which one of the following?
A. double your money in five years at 7.2 percent interest
B. double your money in 7.2 years at 8 percent interest
C. double your money in 8 years at 9 percent interest
D. triple your money in 7.2 years at 5 percent interest
E. triple your money at 10 percent interest in 7.2 years
44. Forty years ago, your mother invested $5,000. Today, that investment is worth $430,065.11. What is the average annual rate of return she earned on this investment?
A. 11.68 percent
B. 11.71 percent
C. 11.78 percent
D. 11.91 percent
E. 12.02 percent
45. Sixteen years ago, Alicia invested $1,000. Eight years ago, Travis invested $2,000. Today, both Alicia’s and Travis’ investments are each worth $2,400. Assume that both Alicia and Travis continue to earn their respective rates of return. Which one of the following statements is correct concerning these investments?
A. Three years from today, Travis’ investment will be worth more than Alicia’s.
B. One year ago, Alicia’s investment was worth less than Travis’ investment.
C. Travis earns a higher rate of return than Alicia.
D. Travis has earned an average annual interest rate of 3.37 percent.
E. Alicia has earned an average annual interest rate of 6.01 percent.
46. Penn Station is saving money to build a new loading platform. Two years ago, they set aside $24,000 for this purpose. Today, that account is worth $28,399. What rate of interest is Penn Station earning on this investment?
A. 6.39 percent
B. 7.47 percent
C. 8.78 percent
D. 9.23 percent
E. 9.67 percent
47. Fifteen years ago, Jackson Supply set aside $130,000 in case of a financial emergency. Today, that account has increased in value to $330,592. What rate of interest is the firm earning on this money?
A. 5.80 percent
B. 6.42 percent
C. 6.75 percent
D. 7.28 percent
E. 7.53 percent
48. Fourteen years ago, your parents set aside $7,500 to help fund your college education. Today, that fund is valued at $26,180. What rate of interest is being earned on this account?
A. 7.99 percent
B. 8.36 percent
C. 8.51 percent
D. 9.34 percent
E. 10.06 percent
49. Some time ago, Julie purchased eleven acres of land costing $36,900. Today, that land is valued at $214,800. How long has she owned this land if the price of the land has been increasing at 10.5 percent per year?
A. 13.33 years
B. 16.98 years
C. 17.64 years
D. 19.29 years
E. 21.08 years
50. On your ninth birthday, you received $300 which you invested at 4.5 percent interest, compounded annually. Your investment is now worth $756. How old are you today?
A. age 29
B. age 30
C. age 31
D. age 32
E. age 33