How much can you afford to spend on the boat

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Q1) You will put $50 per month into a savings account for one of your children. The account earns an annual rate of 3% (with monthly compounding). After 18 years, what is the balance in the account?

a. 47,566.00

b. 986,179.00

c. 85.00

d. 14,297.00

Q2) PMT = $100 per year, N = 25 years, I = 10%. Calculate FV.

a. 1,083.00

b. 123.00

c. 9,834.00

d. 2,766.00

Q3) You want to buy a car. The salesman refuses to tell you the actual price of the car; he only tells you that the payment is $199.00 per month, the rate is 8% interest, and it is a five year loan. Calculate the price of the car, based on this information.

a. 9,814.00

b. 6,522.00

c. 12,240.00

d. 11,777.00

Q4) You want to borrow money to buy a boat. You can afford payments of $100 per month. You expect the loan period to be five years. Interest rates on boat loans are currently at 9% per year. How much can you afford to spend on the boat?

a. 4,817.00

b. 2,212.00

c. 9,125.00

d. 6,322.00

Reference no: EM133125248

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