Reference no: EM132069473

Today, you borrowed $6,200 on your credit card to purchase some furniture. The interest rate is 14.9 percent, compounded monthly. How long will it take you to pay off this debt assuming that you do not charge anything else and make regular monthly payments of $120?

1. Your bank offers an annuity that pays $1 a year for 10 years. The present value interest factor of the annuity is 7.72. Which of the following is a true statement?

A. The cost of buying the annuity is $7.72.

B. If you save $7.72 a year for ten years you will have $1 in your bank account.

C. If you save $1 a year for ten years you will have $7.72 in your bank account.

D. There is no such thing as an annuity.

E. None of the above.

2. Your company has run out of money and can’t pay its bills. Which of the following investors is most likely to take legal action against your company?

A. Common shareholders

B. Preferred shareholders

C. Bond holders

D. Brokers

E. Specialists

3. The dividend yield is:

A. the rate at which the dividend grows.

B. negative when the stock price decreases.

C. the percent of the current stock price that the annual dividend represents.

D. discounted with the capital gains rate to calculate the future value.

E. all of the above.