Reference no: EM132133072
1. The equal annual end-of-year payments required to repay a loan of $60,000 borrowed at 12% for ten years is:
a. $5,332 b. $6,854 c. $10,619 d. 12,472
2. A cash deposit has been made at the beginning of each year over five years in the following amounts: $500, $560, $640, $720, and $800. At 8%, after the five years, this is worth:
a. $4,006 b. $3,685 c. $7,546 d. $4,987
3. Your parents bought their lakeside summer home for $60,000 ten years ago. It now sells for $242,700. The annual rate of return associated with the growth in the value of their home is: a. 5% b. 10% c. 15% d. 20%
4. An investment should generate $50,000 per year at the end of each of the next five years. If the current interest rate associated with an investment of this risk class is 12%, then the maximum you would be willing to pay for this investment is:
a. $250,000 b. $317,642 c. $180,240 d. $154,330
5. Using 7.25%, the annual annuity payment associated with a repayment on a $24,000, 5 year loan is:
a. $5,892.61 b. $7,564.25 c. $3,2457.87 d. $4, 523.43
6. Your target is to have $120,000 for your daughter's college tuition. If you begin saving today equal amounts per year for 14 years at 8%, how much will you need to save per year?
a. $8,571.43 b. $6,574.32 c. $4,955.62 d. $3,435.54
7. You want to retire in 30 years as a millionaire. If 12% is an annual effective return on a stock portfolio during this time period, then how much should you invest per month on an ordinary annuity basis?
a. $286.13 b. $564.85 c. $895.65 d. $1,235.50