Reference no: EM131967436

1. Mike bought a car three years ago. He paid $45,000 and financed it for 5 years at 2% annual interest with monthly payments. He decided to buy a truck and sell his car. About how much is the loan balance on the car today?

$18,541.26

$18,173.98

$ 17,976.46

$17,385.94

2. Mary wants to spend $250,000 during each year in retirement. She wants the money to last for 30 years. She plans to invest $25,000 a year for 35 years and she expects all investments to earn at least 6% a year. Will she reach her goal of being able to spend $250,000 during retirement?

Yes; she will have exactly the right amount.

Yes; she will have about $169,372 more than she needs in her retirement account.

No; her retirement account will short about $655,338 (she will need that much more to reach her goal).

No; her account will be short about $81,000 (she will need about that much more to reach her goal.

3. Compute the expected portfolio return given:

Company       Expected Return     Weight

    X                   -10%                      30%

    Y                     30%                      50%

   Z                      15%                      20%

21%

18%

15%

-3%