Reference no: EM132953190

Questions -

Q1. You work for a furniture store. You normally sell a living room set for $2,500 and finance the full purchase price for 30 monthly payments at 24% APR. You are planning to run a zero interest financing sale during which you will finance the set over 30 months at 0% interest. What is the monthly payment on a zero-interest loan that you must charge during the sale in order to earn your usual combined return on the sale and the financing?

A. $83.33

B. $89.72

C. $95.24

D. $111.62

E. $128.43

Q2. You are expecting annual cash flows of $1,000 in years 1-5; $2,000 in years 6-10; and $5,000 in years 11-20. If the rate of interest is 8% compounded annually, calculate the future value of this cash flow stream.

A. S116,374

B. $107,056

C. $96.993

D. $124,176

E. $212,207

Q3. Your credit card company quotes you a rate of 14%. Interest is billed monthly. What is the actual rate of interest you are paying?

A. 13.98%

B. 14.93%

C. 15.48%

D. 15.97%

E. 16.11%

Q4. A country has a current population of 23 million, however its birth rate is declining at 2.2% per annum. Given this information, determine the population in 10 years' time.

A. 18.79 million

B. 18.41 million

C. 17.79 million

D. 16.79 million

E. 14.79 million

Q5. You currently have $186,000 in an interest-earning account, and from this account you wish to withdraw $15.000 annually for 21 years. What annual rate of return must you make on this account to meet your objective?

A. 9.38%

B. 8.38%

C. 7.38%

D. 6.38%

E. 5.38%