Name: _________________________ Date: ___________________________

MCF3M – Test #3 Review

	Test #3 will be on Wednesday, April 4th, 2007 and will cover the topics of Financial Mathematics and Exponent Rules.  You are permitted to bring an MP3 Player and a bottle of water with you to the test, and I would recommend that you additionally bring some extra work to do with you if you finish early.

	This paper will detail for you the different types of topics that were discussed in this unit.  Tomorrow we will go through this unit in tremendous detail.  

Definitions
	The first page of the test will be definitions.  Here are the following terms that you should be able to know, explain and use.  The definitions are provided in your notes and in the textbook:
	Exponent					base
	Power					principle
	Amount					interest
	Annuity					Present Value
	Loan

	This is a section-by-section view of this unit, with specific questions from each section to be completed.

Simplifying Exponents
	This is using the exponent rules in order to simplify expressions involving exponents.  Please make sure that you practice this, as several questions will be from this section
	p. 86 #8, 9, 10, 11, 16, 17

PAIN Formula
	Please remember that this is for a single deposit.  The PAIN formula is  and it will not be given to you during the test.  You will be asked to solve questions looking for A, P, i and n, as well as compounding periods of more frequently than one year.

RAIN Formula
	This formula is used when you are making regular savings (that is savings each week/day/month/year).  Remember that A is the amount at the end of the investment.  You will be given the formula  for the test, but you will not be told when it should be used, or what it is used for.  Please expect to have to solve for A, R, or n in these types of questions.

PV Formula
	We are learning this today.  This is used when making regular payments to a loan (that is payments every week/day/month/year).  Remember that PV is the amount at the beginning of the investment (also called the principle in the PAIN formula).  You will be given the formula for the test, but you will not be told when it should be used or what it is used for.  Please expect to have to solve for PV, R or n in these types of questions.

Practice Problems

1) Simplify
a) 	b) 		c) 	d) 
2) Phil turned $1200 into $1300 in the past six months investing, compounded monthly.  What was his annual interest rate?

3) Holly saves $75 per week at 5.2% compounded weekly and turns it into $10,000.  How long did she invest for?

4) Melissa H. borrows $10,000 and pays it back over 5 years at 8% compounded quarterly.  How much must she pay each quarter?

5) Mr. Sadler wants to buy a house.  He wants to pay it over 25 years, and can afford $300 per week.  His bank gives him an interest rate of 5.5% compounded weekly.  How much of a house can he afford? (hint: remember this is a loan question)

6) Evan C. borrows $50,000 to go to school.  He is able to pay it back $3000 per year, and is charged 4.5% interest.  How long will it take him to pay off this loan?