Congratulations. You just won the California State Lottery. The amount awarded is paid in 20 equal annual installments, at the beginning of each year. You can invest your money at 6.6%, compounded annually. You have calculated that the lottery is worth $20,975,400 today. How much was the amount awarded?
A) $75,310,294
B) $36,000,000
C) $81,047,770
D) $42,000,000
A friend of yours borrows $19,500 from the bank at 8% annually to be repaid in 10 equal annual end-of-year installments. The interest paid on this loan in year three is
A) $1,336.01.
B) $1,560.00.
C) $2,906.11.
D) $1,947.10.
If a loan of $10,000 is paid back in equal annual end-of-year payments of $2,570.69 during the next five years, what is the annual interest rate on the loan?
A) 2%
B) 5%
C) 9%
D) 12%
What is the present value of an investment that pays $10,000 every year at year-end for the next five years and $15,000 every year at year-end for years six through 10? The annual rate of interest for the investment is 9%.
A) $125,000.00
B) $97,250.00
C) $135,173.00
D) $76,827.50
If you have $375,000 in an account earning 9% annually, what constant amount could you withdraw each year and have nothing remaining at the end of 20 years?
A) $7,500
B) $18,750
C) $66,912
D) $5,575
E) $41,080
You wish to borrow $12,000 to be repaid in 60 monthly installments of $257.93. The annual interest rate is
A) 10.50%.
B) 12.75%.
C) 15.25%.
D) 6.50%.
E) 8.80%.
You wish to purchase a condo at a cost of $175,000. You are able to make a down payment of $35,000 and will borrow $140,000 for 30 years at an interest rate of 7.25%. How much is your monthly payment? To solve this problems with an EXCEL spreadsheet, you would enter
A) =PMT(7.25/12,360,140000,0,1)
B) =PMT(.0725/12,360,140000,0,1)
C) =PMT(7.25,30,140000,0,1) /12
D) =PMT(.0725/12,360,175000,0,1)
