Reference no: EM133116041

Questions -

Q1. Dana would like to have a loan from a bank for 12 years. She is to make bi-weekly payments (a payment every two weeks or 26 payments per year) at the end of each bi-weekly period at an interest rate of 6.5% per year, or 0.25% per two weeks (6.5% / 26 = 0.25% per period). If the loan amount is $105,000 what would be each payment?

$577

$667

$386

$485

Q2. Vera wants to buy an antique car for $75,000 on her 36th birthday. She would like to begin with a yearly amount deposited in her money market account earning 6.5% on her 26th birthday, and increase the amount each year by the inflation rate of 4.5%. What amount should she plan on depositing on her 26th birthday?

$3,986

$2,346

$3,521

$5,456

Q3. If you took $75,000 from the bank as a loan at 6% interest per year and paid amounts back as shown in the table below, how much will you still owe at the end of 8 years?

$62,765

$56,876

$42,320

$48,765

Q4. Ashton, on his 25th birthday started a 401K account earning 4.5% per year compounded yearly. He deposited $1,500 to begin the account, and put in $1,000 on his 26th birthday. From the 27th to his 35th birthday, he put in $100 more than the previous year, but could not put in anything for five years after that when he was under-employed. He would now like to start depositing money in the account again, starting with $500 and increasing it by $50 each year till he retires on his 65th birthday. How much money can he expect to have in the account on his 65th birthday?

$165,430

$120,500

$117,800

$135,090

Q5. Mary would like to save for retirement. She starts a money market account on her 28th birthday with $2,000 with an investment company which is guaranteed to earn at least 2% per year, compounded six-monthly. She would like to retire on her 67th birthday by being able to make 2 deposits per year. She starts the first deposit of $1,000 six months after her 28th birthday, followed by another $1,000 deposit six months later on her 29th birthday. She increases the deposit the next year by $100, and repeats the deposit pattern which ends on her 67th birthday. How much can she expect to have collected in her account on her 67th birthday?

$259,350

$423,540

$315,250

$546,630