Question

# Suppose you earned a \$435,000 bonus this year and invested it at 8.25% per year. How...

Suppose you earned a \$435,000 bonus this year and invested it at 8.25% per year. How much could you withdraw at the end of each of the next 20 years?

 a. \$45,114.15
 b. \$45,123.65
 c. \$45,133.15
 d. \$45,152.15
 e. \$45,142.6

Suppose you just won the state lottery, and you have a choice between receiving \$3,550,000 today or a 20-year annuity of \$250,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.

 a. 4.11%
 b. 3.51%
 c. 4.71%
 d. 2.91%
 e. 2.31

What's the present value of \$4,000 discounted back 5 years if the appropriate interest rate is 4.5%, compounded semiannually?

 a. \$2,556.31
 b. \$2,566.01
 c. \$2,575.71
 d. \$2,546.61
 e. \$2,536.91

American Express and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 15.75%, with interest paid monthly, what is the card's EFF%?

 a. 13.54%
 b. 15.24%
 c. 18.64%
 d. 16.94%
 e. 20.34

Billy Thornton borrowed \$165,000 at a rate of 7.25%, simple interest, with interest paid at the end of each month. The bank uses a 360-day year. How much interest would Billy have to pay in a 30-day month?

 a. \$1,001.68
 b. \$999.28
 c. \$992.08
 d. \$994.48
 e. \$996.88

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