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8 Consumer Mathematics
Exercise Set 8-1
1. Percent means per one hundred. 2
15. = 0.666 = 66.6%
3
2. To change a percent to a decimal, drop the
percent sign and move the decimal point two 1
places to the left; to change a percent to a 16. = 0.166 = 16.6%
6
fraction put the percent number over 100 and
reduce. 1
17. 1 = 1.25 = 125%
4
3. To turn a decimal into a percent move the
decimal two places to the right and add the % 3
18. 2 = 2.375 = 237.5%
sign; to change a fraction into a percent, divide 8
numerator by denominator to put it in decimal
form, then change the decimal to a percent. 19. 18% = 18.% = 0.18
4. When you take a percent “of” something you 20. 23% = 23.% = 0.23
need to multiply. 21. 6% = 6.% = 0.06
5. First find the amount of increase or decrease, 22. 2% = 2.% = 0.02
then divide by the original amount to find the
percent increase or decrease. 23. 62.5% = 0.625
7. 0.63 = 63% 36 9
28. 36% = =
100 25
8. 0.87 = 87%
9
9. 0.025 = 2.5% 29. 9% =
100
10. 0.0872 = 8.72%
4 1
30. 4% = =
11. 1.56 = 156% 100 25
41 25
1 25 1 46. ___ is 7% of $1799.99
36. 4 % = 6 = ⋅ 6 = = x = 0.07 × 1799.99
6 100 100 600 24
x ≈ 126.00
37. Find 5% of 299.99. The clerk receives $126.
0.05 × 299.99 = 15 rounded
299.99 + 15 = 314.99 47. ___ is 25% of $199.99
The sales tax is $15 and the total cost is x = 0.25 × 199.99
$314.99. x ≈ 50.00
199.99 − 50.00 = 149.99
38. Find 7% of 59.95. The grill’s sale price is $149.99.
0.07 × 59.95 = 4.20 rounded
59.95 + 4.20 = 64.15 48. ___ is 12% of $2,499.99
The sales tax is $4.20 and the total cost is x = 0.12 × 2,499.99
$64.15. x ≈ 300.00
The commission is $300.
39. Find 6% of 149.99.
0.06 × 149.99 = 9.00 rounded 49. $75.36 is 6% of ____
149.99 + 9.00 = 158.99 75.36 = 0.06 × x
The sales tax is $9.00 and the total cost is 75.36 0.06 x
=
$158.99. 0.06 0.06
1, 256 = x
40. Find 4.5% of 19.99. The item he sold cost $1,256.
0.045 × 19.99 = 0.90 rounded
19.99 + 0.90 = 20.89 50. $96.00 is 6% of ____
The sales tax is $0.90 and the total cost is 96.00 = 0.06 × x
$20.89. 96.00 0.06 x
=
0.06 0.06
41. Find the decrease.
1, 600 = x
999.99 − 399.99 = 600
The item cost $1,600.
600
Percent decrease = ≈ 0.60 = 60%
999.99 51. ___ is 19% of 12,872
The reduction in price is 60%. x = 0.19 × 12,872
x ≈ 2,446
42. Find the decrease. About 2,446 were self-help books.
109.99 − 99.99 = 10
10 52. $200.00 is 25% of ____
Percent decrease = ≈ 0.09 = 9% 200 = 0.25 x
109.99
The reduction in price is 9%. 200 0.25 x
=
0.25 0.25
43. Original price is 249.99 + 80.00 = 329.99 x = 800
80.00 The original cost of the laptop was $800.
Percent decrease = ≈ 0.24 = 24%
329.99
The reduction in price is 24%.
8-2 Simple Interest 305
53. Find the increase $54,747 − $50,480 = $4,267. off so their total discount will be 75%, not
4, 267 100%.
Percent increase = ≈ 0.085 = 8.5%
50, 480
30
The increase in pay is 8.5%. 62. Percent decrease in grill price = = 33.3%.
90
54. Find the increase 169.5 − 97 = 72.5. 30
Percent increase in rides = = 50%.
60
72.5 The discount on the grill is actually more than
Percent increase = ≈ 0.747 = 74.7%
97 advertised. Allowing for rounding, neither is
The increase in subscribers is 74.7%. lying.
60. Next day: Find 30% of $100.00. 8. I = Prt = (25, 000)(0.085)(0.5) = 1, 062.5
P = 0.3 × 100 The simple interest is $1,062.50.
P = 30
The stock is worth $100 − $30 or $70 the next 9. I = Prt
day. 360 = (1,800)(0.10)t
Next week: Find 30% of $70. 2=t
P = 0.3 × 70 The time is 2 years.
P = 21
10. I = Prt
After both fluctuations, the stock is worth 72 = (600)(0.04)t
$70 + $21 or $91 per share, which means you 3=t
do not break even. The time is 3 years.
61. The friend will receive 50% off the discounted
price of the TV not the original price, so they
will receive an additional 0.5(0.5 P ) = 0.25 P
306 Chapter 8 Consumer Mathematics
nt
They are the same regardless of principal. ⎛ r⎞
8. A = P ⎜ 1 + ⎟
⎝ n⎠
66. The longer the term, the less money received 2(7)
⎛ 0.05 ⎞
and the higher the true interest rate. So it is = 1,550 ⎜1 + ⎟
worse for the borrower if the term is longer. ⎝ 2 ⎠
= 2,190.11
I = 2,190.11 − 1,550 = 640.11
Exercise Set 8-3 The interest is $640.11 and the future value is
$2,190.11.
1. Simple interest is earned (or charged) on the
total amount once; with compound interest the nt
interest is deposited into the account at the end ⎛ r⎞
9. A = P ⎜1 + ⎟
of the compounding period and begins earning ⎝ n⎠
interest as well. 4(12)
⎛ 0.08 ⎞
= 625 ⎜1 + ⎟
2. If interest is compounded quarterly, it means it ⎝ 4 ⎠
≈ 1, 616.92
is compounded 4 times a year; compounded
monthly is 12 times a year. I = 1,616.92 − 625 = 991.92
The interest is $991.92 and the future value is
3. The effective rate of an investment is the $1,616.92.
simple interest rate that would yield the same
nt
future value. ⎛ r⎞
10. A = P ⎜1 + ⎟
⎝ n⎠
4. An annuity is an investment in which a deposit 4(2)
is made every compounding period and ⎛ 0.04 ⎞
= 2,575 ⎜1 + ⎟
interest does not change during the term of the ⎝ 4 ⎠
investment. Interest is earned on the previous ≈ 2, 788.36
compounding period’s balance at the end of I = 2,788.36 − 2,575 = 213.36
the compounding period. The interest is $213.36 and the future value is
$2,788.36.
nt
⎛ r⎞
5. A = P ⎜1 + ⎟ ⎛ r⎞
nt
⎝ n⎠ 11. A = P ⎜ 1 + ⎟
1(10) ⎝ n⎠
⎛ 0.04 ⎞
= 825 ⎜1 + ⎟ ⎛ 0.05 ⎞
2(6)
⎝ 1 ⎠ = 1,995 ⎜1 + ⎟
≈ 1, 221.20 ⎝ 2 ⎠
I = 1, 221.20 − 825 = 396.2 ≈ 2, 683.05
The interest is $396.20 and the future value is I = 2,683.05 − 1,995 = 688.05
$1,221.20. The interest is $688.05 and the future value is
$2,683.05.
nt
⎛ r⎞
6. A = P ⎜1 + ⎟ ⎛ r⎞
nt
⎝ n⎠ 12. A = P ⎜1 + ⎟
1⋅5 ⎝ n⎠
⎛ 0.02 ⎞
= 3, 250 ⎜1 + ⎟ ⎛ 0.06 ⎞
4(7)
⎝ 1 ⎠ = 460 ⎜1 + ⎟
≈ 3,588.26 ⎝ 4 ⎠
I = 3,588.26 − 3,250 = 338.26 ≈ 697.92
The interest is $338.26 and the future value is I = 697.92 − 460 = 237.92
$3,588.26. The interest is $237.92 and the future value is
$697.92.
nt 2(6)
⎛ r⎞ ⎛ 0.03 ⎞
7. A = P ⎜1 + ⎟ = 75 ⎜1 + ⎟ ≈ 89.67
⎝ n⎠ ⎝ 2 ⎠
I = 89.67 − 75 = 14.67
8-3 Compound Interest 311
r 0.075 r 0.105
37. R = 2,250, n = 2, t = 4, = = 0.0375 41. R = 4,000, n = 1, t = 5, = = 0.105
n 2 n 1
⎡⎛ r ⎞nt ⎤ ⎡⎛ r ⎞nt ⎤
R ⎢⎜1 + ⎟ − 1⎥ R ⎢⎜ 1 + ⎟ − 1⎥
⎢⎝ n ⎠ ⎥⎦ ⎢⎝ n ⎠ ⎥⎦
A= ⎣ A= ⎣
r r
n n
⎛ (1 + 0.0375)2(4) − 1 ⎞ ⎛ (1 + 0.105)1(5) − 1 ⎞
= 2, 250 ⎜ ⎟ = 4, 000 ⎜ ⎟
⎜ 0.0375 ⎟ ⎜ 0.105 ⎟
⎝ ⎠ ⎝ ⎠
≈ 20,548.25 ≈ 24, 664.64
The future value of the annuity is $20,548.25.
The annuity will be worth $24,664.64 in 5
r 0.08 years.
38. R = 600, n = 4, t = 3, = = 0.02
n 4
r 0.04
⎡⎛ r ⎞nt ⎤ 42. R = 160, n = 4, t = 4, = = 0.01
R ⎢⎜ 1 + ⎟ − 1⎥ n 4
⎢⎝ n ⎠ ⎥⎦ ⎡⎛ r ⎞ nt ⎤
A= ⎣ R ⎢⎜ 1 + ⎟ − 1⎥
r
⎢⎝ n ⎠ ⎥⎦
n A= ⎣
⎛ (1 + 0.02) 4(3) − 1 ⎞ ⎛r⎞
= 600 ⎜ ⎟ ⎜ ⎟
⎜ 0.02 ⎟ ⎝n⎠
⎝ ⎠ ⎛ (1 + 0.01)4(4) − 1 ⎞
≈ 8, 047.25 = 160 ⎜ ⎟
The future value of the annuity is $8,047.25. ⎜ 0.01 ⎟
⎝ ⎠
≈ 2, 761.26
r 0.05
39. R = 200, n = 4, t = 20, = = 0.0125
n 4 The annuity will be worth $2,761.26 in 4
years.
⎡⎛ r ⎞ nt ⎤
R ⎢⎜ 1 + ⎟ − 1⎥
⎢⎝ n ⎠ ⎥⎦ r 0.08
A= ⎣ 43. R = 2,000, n = 2, t =10,
n
=
2
= 0.04
r
n ⎡⎛ r ⎞nt ⎤
⎛ (1 + 0.0125) 4(20) − 1 ⎞ R ⎢⎜ 1 + ⎟ − 1⎥
= 200 ⎜ ⎟ ⎢⎝ n ⎠ ⎥⎦
⎜
⎝ 0.0125 ⎟
⎠ A= ⎣
r
≈ 27, 223.76
n
The future value of the annuity is $27,223.76. ⎛ (1 + 0.04) 2(10) − 1 ⎞
= 2, 000 ⎜ ⎟
r 0.09 ⎜ 0.04 ⎟
40. R = 200, n = 2, t = 2, = = 0.045 ⎝ ⎠
n 2 ≈ 59,556.16
They will have saved $59,556.16 in 10 years.
⎡⎛ r ⎞ nt ⎤
R ⎢⎜ 1 + ⎟ − 1⎥
⎢⎝ n ⎠ ⎦⎥ r 0.06
A= ⎣ 44. R = 800, n = 1, t = 3,
n
=
1
= 0.06
r
n ⎡⎛ r ⎞nt ⎤
⎛ (1 + 0.045)2(2) − 1 ⎞ R ⎢⎜1 + ⎟ − 1⎥
= 200 ⎜ ⎟ ⎢⎝ n ⎠ ⎥⎦
⎜
⎝ 0.045 ⎟
⎠ A= ⎣
r
≈ 855.64
The person can spend $855.64 for the n
⎛ (1 + 0.06)1(3) − 1 ⎞
vacation. = 800 ⎜ ⎟
⎜ 0.06 ⎟
⎝ ⎠
≈ 2,546.88
314 Chapter 8 Consumer Mathematics
They need to make a regular monthly payment 49. After the first two years there will be:
of $2,095.18 to reach their goal.
nt
⎛ r⎞
46. A = 10,000, n = 52, t = 4, A = P ⎜1 + ⎟
r 0.065 ⎝ n⎠
= = 0.00125 2(2)
⎛ 0.04 ⎞
n 52 = 5, 000 ⎜1 + ⎟
⎝ 2 ⎠
≈ 5, 412.16
⎛r⎞
A⎜ ⎟
R= ⎝n⎠ The principal for the last three years is
nt
⎛ r⎞ $5,412.16 + 2,000 = $7,412.16. Amount over
⎜1 + ⎟ − 1 the next three years is:
⎝ n⎠
10, 000 ( 0.00125 ) nt
R= ⎛ r⎞
(1 + 0.00125) − 1
52(4)
A = P ⎜1 + ⎟
⎝ n⎠
= 42.13 ⎛ 0.04 ⎞
2(3)
= 7, 412.16 ⎜1 + ⎟
You will need to make a regular weekly ⎝ 2 ⎠
≈ 8,347.30
payment of $42.13 to reach your goal.
⎛r⎞ ⎛ r⎞
nt
A⎜ ⎟ A = P ⎜1 + ⎟
R= ⎝n⎠ ⎝ n⎠
nt 4(2)
⎛ r⎞ ⎛ 0.03 ⎞
⎜1 + ⎟ − 1 = 3,500 ⎜1 + ⎟
⎝ n⎠ ⎝ 4 ⎠
4, 000, 000 ( 0.055 ) ≈ 3, 715.60
R=
(1 + 0.055) − 1
2(10)
The principal for the last three years is
≈ 114, 717.32 $3,715.6 − 800 = $2,915.60. Amount over the
⎜ 1 + ⎟ −1
There is $3,285.86 in the account at the end of ⎝ n⎠
6 years. 20, 232.75 ( 0.005 )
R=
(1 + 0.005) − 1
12(5)
The principal for the next year is The annuity costs more for the same yield.
$936.64 + 400 = $1,336.64. Amount over the But the advantage is you do not have to have a
next year is: lump sum of money as you would in the first
investment.
nt
⎛ r⎞
A = P ⎜1 + ⎟ Exercise Set 8-4
⎝ n⎠
4(1)
⎛ 0.02 ⎞ When a person borrows money to purchase
= 1,336.64 ⎜1 + ⎟
1.
⎝ 4 ⎠ something and makes periodic payments it’s
≈ 1,363.57 called an installment loan.
The principal for the next three years is 2. A finance charge is a fee charged by a lender
$1,363.57 − 200 = $1,163.57. The amount for borrowing money.
over the next three years is:
3. The purchase price is what the item cost, the
nt amount financed is how much was borrowed.
⎛ r⎞
A = P ⎜1 + ⎟ The amount financed is the purchase amount
⎝ n⎠ minus any down payment.
4(3)
⎛ 0.02 ⎞
= 1,163.57 ⎜1 + ⎟
⎝ 4 ⎠ 4. Closed-ended credit is paid off over a specific
≈ 1, 235.34 period of time; open-ended credit does not
have to be paid off by any specific date.
There is $1,235.34 in the account at the end of
6 years. 5. The annual percentage rate is the true interest
charged in a year. It is typically different from
nt the stated interest rate because interest can be
⎛ r⎞
52. A = P ⎜1 + ⎟ calculated using different methods, resulting in
⎝ n⎠ different true rates.
12⋅5
⎛ 0.06 ⎞
= 15, 000 ⎜1 + ⎟ 6. When interest is computed by the unpaid
⎝ 12 ⎠
≈ 20, 232.75 balance method, the consumer pays only on
the balance remaining at the end of the billing
The future value of the investment is cycle. The average daily balance takes into
$20,232.75. consideration the average balance over the
billing cycle and charges based on the average
rather than the unpaid balance. There are
316 Chapter 8 Consumer Mathematics
9. Down payment: (15% of purchase price) Step 2: Find the row in Table 8-1 with 48
0.15($375) = $56.25. payments. Notice that $18.31 is closest to the
Amount Financed: (purchase price minus value from Step 1.
down payment) $375 − $56.25 = $318.75.
Finance charge: (total payments minus amount Step 3: Move up the table and find the APR
financed) $27.25 × 12 − $318.75 at the top of the corresponding column. The
= $327 − $318.75 = $8.25 APR is 8.5%.
Installment Price: (total monthly payments
plus down payment) $327 + $56.25 = $383.25 14. Step 1: Find the finance charge per $100
borrowed.
10. Down payment: (given) $95. Finance charge = total payments – amount
Amount Financed: (purchase price minus financed: $319(36) − $10,400
down payment) $845 − $95 = $750. = $11,484 – 10,400 = $1,084
Finance charge: (total payments minus amount Finance Charge
× $100
financed) $128.75 × 6 − $750 Amount Financed
= $772.5 − $750 = $22.50 $1, 084
Installment Price: (total monthly payments = × $100
$10, 400
plus down payment) $772.50 + $95 = $867.50
= $10.42
11. Down payment: (20% of purchase price)
0.20(925) = $185. Step 2: Find the row in Table 8-1 with 36
Amount Financed: (purchase price minus payments. Notice that $10.34 is closest to the
down payment) $925 − $185 = $740. value from Step 1.
Finance charge: (5% of amount financed)
0.05($740) = $37 Step 3: Move up the table and find the APR
Installment Price: (purchase price plus finance at the top of the corresponding column. The
charge) $925 + $37 = $962 APR is 6.5%.
Monthly payment: (amount financed plus
finance charge divided by number of 15. Step 1: Find the finance charge per $100
payments) ($740 + $37) ÷ 18 = $777 ÷ 18 borrowed.
= $43.17
8-4 Installment Buying 317
Finance charge = total payments – amount Step 3: Move up the table and find the APR
financed: $71.05(12) − $800 = $852.60 − $800 at the top of the corresponding column. The
= $52.60 APR is 9.5%.
Finance Charge
× $100 18. Step 1: Find the finance charge per $100
Amount Financed
borrowed.
$52.60 Finance charge = total payments – amount
= × $100
$800 financed: $389.50(60) − $19,900
= $6.58 = $23,370 – $19,900 = $3,470
Finance Charge
Step 2: Find the row in Table 8-1 with 12 × $100
Amount Financed
payments. Notice that $6.62 is closest to the
$3, 470
value from Step 1. = × $100
$19, 900
Step 3: Move up the table and find the APR = $17.44
at the top of the corresponding column. The
APR is 12%. Step 2: Find the row in Table 8-1 with 60
payments. Notice that $17.40 is closest to the
16. Step 1: Find the finance charge per $100 value from Step 1.
borrowed.
Finance charge = total payments – amount Step 3: Move up the table and find the APR
financed: $84(12) − $950 = $1,008 – $950 at the top of the corresponding column. The
= $58 APR is 6.5%.
Finance Charge
× $100 19. k = 18, R = $614, APR = 8.5% so h (from table
Amount Financed
8-1) = $6.86
$58
= × $100
$950 kRh
= $6.11 u=
100 + h
18($614)($6.86)
Step 2: Find the row in Table 8-1 with 12 =
payments. Notice that $6.06 is closest to the 100 + $6.86
value from Step 1. = $709.50
Step 3: Move up the table and find the APR Payoff amount: 19 × $614 − $709.50
at the top of the corresponding column. The = $10,956.50
APR is 11%.
20. k = 12, R = $319, APR = 6.5% so h (from
17. Step 1: Find the finance charge per $100 table 8-1) = $3.56
borrowed.
Finance charge = total payments – amount kRh
financed: $90(24) − $1,960 = $2,160 – 1,960 u=
100 + h
= $200 12($319)($3.56)
Finance Charge =
× $100 100 + $3.56
Amount Financed
= $131.59
$200
= × $100
$1,960 Payoff amount: 13 × $319 − $131.59
= $10.20 = $4,015.41
( R H É A .)
Planche 30.
API OU HAPI.
( A P I S, TAU R E AU C O N SA C R É A LA L U N E .)
( TAU R E AU C O N SA C R É AU D I E U P H R É .)
( A R O U E R I S, A R O E R I S, A P O L LO N .)
[1] Plutarque.
[2] Théodoret.
[3] Iamblique.