You have borrowed $70,000 to buy rental property. You plan to make monthly payments over a 15-year period

You have borrowed $70,000 to buy rental property. You plan to make monthly payments over a 15-year period. The bank has offered you a 9% interest rate compounded monthly. Calculate the principal paid to the bank in month two of the loan. Assume end-of-period payments.

A) $184.01

B) $186.38

C) $188.46

D) $190.64

E) $192.73

A friend of yours plans to begin saving for retirement by depositing $2,000 at the end of each year for the next 25 years. If she can earn 10% annually on her investment, how much will she have accumulated at the end of 25 years?

A) $50,000

B) $196,692

C) $100,000

D) $216,361

How much must you deposit at the end of each of the next 10 years in a savings account paying 5% annually in order to have $10,000 saved by the end of the 10th year?

A) $1,000

B) $1,638

C) $1,500

D) $795

What is the value today of an investment that pays $500 every year at year-end during the next 15 years if the annual interest rate is 9%?

A) $4,030.50

B) $7,500.00

C) $3,500.00

D) $7,000.00

How much would an investor be willing to pay today for an investment that returns $1,000 every year at year-end for five years if he wants to earn a 10% annual return on the investment?

A) $1,000

B) $3,791

C) $5,000

D) $7,700

A friend of yours would like you to lend him $5,000 today to be paid back in 5 annual payments. What would be the equal annual end-of-year payment on this loan if you charge your friend 7% interest?

A) $869.45

B) $1,000.00

C) $1,219.51

D) $1,350.00

Recently you borrowed money for a new car. The loan amount is $15,000 to be paid back in equal annual payments which begin today, and will continue to be payable at the beginning of each year for a total of five years. Interest on the loan is 8%. What is the amount of the loan payment?

A) $3,756.85

B) $4,200.00

C) $3,478.31

D) $3,000.00

You buy a race horse, which has a winning streak for four years, bringing in $500,000 per year, and then it dies of a heart attack

You buy a race horse, which has a winning streak for four years, bringing in $500,000 per year, and then it dies of a heart attack. If you paid $1,518,675 for the horse four years ago, what was your annual return over this four-year period?

A) 8%

B) 33%

C) 18%

D) 12%

You are considering a home loan with monthly payments at an annual percentage yield of 5.116%. What is the quoted rate of interest on the loan?

A) 4.5%

B) 4.75%

C) 5%

D) 6%

You deposited $2,000 in a bank account paying 6% on January 1, 2004, and then you made $2,000 deposits on January 1 in 2005 and 2006. Which of the following expressions will calculate your bank balance just after the last payment was deposited?

A) FV = $2,000[1.06]-1 + $2,000[1.06]-2 + $2,000[1.06]-3 

B) FV = $2,000[1.06]1 + $2,000[1.06]2 + $2,000[1.06]3 

C) FV = $2,000[1.06]0 + $2,000[1.06]1 + $2,000[1.06]2 

D) FV = $2,000[1.06]-0 + $2,000[1.06]-1 + $2,000[1.06]-2 + $1,000[1.06]-3 

Harry just bought a new four-wheel-drive Jeep Cherokee for his lumber business. The price of the vehicle was $35,000, of which he made a $5,000 down payment and took out an amortized loan for the rest. His local bank made the loan at 12% interest for five years. He is to pay back the principal and interest in five equal annual installments beginning one year from now. Determine the amount of Harry's annual payment.

A) $8,322

B) $9,600

C) $9,709

D) $6,720

Your investment goal is to have $3,000,000 in 40 years for retirement. You decide to invest in a mutual fund today that pays 12% per year compounded monthly. How much must you invest at the end of each month to meet your investment goal? Round to the nearest $1.

A) $245

B) $255

C) $285

D) $305

E) $315

You have borrowed $70,000 to buy a sports car. You plan to make monthly payments over a 15-year period. The bank has offered you a 9% interest rate compounded monthly. Calculate the total amount of interest dollars you will pay the bank over the life of the loan. Round to the nearest dollar and assume end-of-month payments.

A) $47,451

B) $51,644

C) $54,776

D) $57,798

George and Laura will be retiring in four years and would like to buy a lake house. They estimate that they will need $550,000

George and Laura will be retiring in four years and would like to buy a lake house. They estimate that they will need $550,000 at the end of four years to buy this house. They want to make four equal annual payments into an account at the end of each year. If they can earn 8% on their money, compounded annually, over the next four years, how much must they invest at the end of each year for the next four years to have accumulated $550,000 by retirement?

A) $137,500

B) $122,056

C) $113,015

D) $131,821

You have been accepted to study gourmet cooking at Le Cordon Bleu Culinary Institute in Paris, France. You will need $15,000 every six months (beginning six months from now) for the next three years to cover tuition and living expenses. Mom and Dad have agreed to pay for your education. They want to make one deposit now in a bank account earning 6% interest, compounded semiannually, so that you can withdraw $15,000 every six months for the next three years. How much must they deposit now?

A) $97,026

B) $73,760

C) $90,000

D) $81,258

Horace and Myrtle want to buy a house. Their banker offered them a fully amortizing $95,000 loan at a 12% annual rate for 20 years. What will their monthly payment be if they make equal monthly installments over the next 20 years?

A) $1,046

B) $749

C) $1,722

D) $1,346

Harold Hawkins bought a home for $320,000. He made a down payment of $45,000; the balance will be paid off over 30 years at a 6.775% rate of interest. How much will Harold's monthly payments be? Round off to the nearest $1.

A) $1,450

B) $1,788

C) $3,200

D) $1,682

You are going to pay $100 into an account at the beginning of each of the next 40 years. At the beginning of the 41st year

Use the following information in solving the following question(s).

You are going to pay $100 into an account at the beginning of each of the next 40 years. At the beginning of the 41st year, you buy a 30-year annuity whose first payment comes at the end of the 41st year (the account pays 12%).

How much money will be in the account at the end of year 40 (round to the nearest $1,000)?

A) $77,000

B) $86,000

C) $69,000

D) $93,000

How much will you receive at the end of the 41st year (i.e., the first annuity payment)? Round to the nearest $100.

A) $93,000

B) $7,800

C) $11,400

D) $10,700

A retirement plan guarantees to pay you or your estate a fixed amount for 20 years. At the time of retirement, you will have $31,360 to your credit in the plan. The plan anticipates earning 8% interest annually over the period you receive benefits. How much will your annual benefits be, assuming the first payment occurs one year from your retirement date?

A) $682

B) $6,272

C) $2,000

D) $3,194

SellUCars, Inc. offers you a car loan at an annual interest rate of 8% compounded monthly. What is the annual percentage yield of the loan?

A) 8.00%

B) 8.24%

C) 8.30%

D) 8.44%

If you put $510 in a savings account at the beginning of each year for 30 years, how much money will be in the account

If you put $510 in a savings account at the beginning of each year for 30 years, how much money will be in the account at the end of the 30th year? Assume that the account earns 5%, and round to the nearest $100.

A) $33,300

B) $32,300

C) $33,900

D) None of the above

If you put $10 in a savings account at the beginning of each year for 11 years, how much money will be in the account at the end of the 11th year? Assume that the account earns 11%, and round to the nearest $100.

A) $220

B) $200

C) $190

D) $180

To find the present value of an annuity due, one could

A) find the present value of an ordinary annuity and add one extra payment.

B) find the present value of an ordinary annuity but N = 1 for the number of periods.

C) find the present value of an ordinary annuity and divide by 1 + i.

D) find the present value of an ordinary annuity and multiply by 1 + i.

How much money must you pay into an account at the beginning of each of 30 years in order to have $10,000 at the end of the 30th year? Assume that the account pays 11% per annum, and round to the nearest $1.

A) $39

B) $46

C) $50

D) None of the above

How much money must you pay into an account at the beginning of each of 20 years in order to have $10,000 at the end of the 20th year? Assume that the account pays 12% per annum, and round to the nearest $1.

A) $1,195

B) $111

C) $124

D) $139

How much money must you pay into an account at the beginning of each of five years in order to have $5,000 at the end of the fifth year? Assume that the account pays 12% per year, and round to the nearest $10.

A) $700

B) $1,390

C) $1,550

D) $790

How much money must you pay into an account at the beginning of each of 11 years in order to have $5,000 at the end of the 11th year? Assume that the account pays 8% per year, and round to the nearest $1.

A) $700

B) $257

C) $300

D) $278

It is January 1st and Darwin Davis has just established an IRA (Individual Retirement Account). Darwin

It is January 1st and Darwin Davis has just established an IRA (Individual Retirement Account). Darwin will put $1,000 into the account on December 31st of this year and at the end of each year for the following 39 years (40 years total). How much money will Darwin have in his account at the beginning of the 41st year? Assume that the account pays 12% interest compounded annually, and round to the nearest $1,000.

A) $93,000

B) $766,000

C) $767,000

D) $850,000

 What is the present value of $27 received at the end of each year for five years? Assume a discount rate of 9%. The first payment will be received one year from today (round to the nearest $1).

A) $42

B) $114

C) $88

D) $105

What is the present value of $300 received at the beginning of each year for five years? Assume that the first payment is not received until the beginning of the third year (thus the last payment is received at the beginning of the seventh year). Use a 10% discount rate, and round your answer to the nearest $100.

A) $1,100

B) $1,000

C) $900

D) $1,200

Ingrid Birdman can earn a nominal annual rate of return of 12%, compounded semiannually. If Ingrid made 40 consecutive semiannual deposits of $500 each, with the first deposit being made today, how much will she accumulate at the end of Year 20? Round off to the nearest $1.

A) $52,821

B) $57,901

C) $82,024

D) $64,132

Charlie Stone wants to retire in 30 years, and he wants to have an annuity of $1,000 a year for 20 years after retirement. Charlie wants to receive the first annuity payment at the end of the 30th year. Using an interest rate of 10%, how much must Charlie invest today in order to have his retirement annuity (round to the nearest $10)?

A) $500

B) $490

C) $540

D) $570

What is the present value of an annuity of $100 received at the end of each year for seven years?

What is the present value of an annuity of $100 received at the end of each year for seven years? The first payment will be received one year from today (round to nearest $10). The discount rate is 13%.  To solve this problem with a financial calculator, the correct choice is

A) N=7, i=13, PMT= 100, FV=0, solve for PV

B) N=7, i=13, PV= 100, FV=0, solve for FV

C) N=7, i=13, PMT= 100, FV=100, solve for PV

D) N=7, i=.13, PMT= 100, FV=0, solve for PV

What is the present value of an annuity of $27 received at the beginning of each year for the next six years? The first payment will be received today, and the discount rate is 10% (round to nearest $10).

A) $120

B) $130

C) $100

D) $110

What is the present value of $150 received at the beginning of each year for 16 years? The first payment is received today. Use a discount rate of 9%, and round your answer to the nearest $10.

A) $1,360

B) $1,480

C) $1,250

D) $1,210

What is the present value of $250 received at the beginning of each year for 21 years? Assume that the first payment is received today. Use a discount rate of 12%, and round your answer to the nearest $10.

A) $1,870

B) $2,090

C) $2,117

D) $3,243

What is the present value of an annuity of $12 received at the end of each year for seven years? Assume a discount rate of 11%. The first payment will be received one year from today (round to the nearest $1).

A) $25

B) $40

C) $57

D) $118