Question

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?

Select the correct answer.

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.

Select the correct answer.

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?

Select the correct answer.

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%?

Select the correct answer.

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?

Select the correct answer.

a. $1,001.68

b. $999.28

c. $992.08

d. $994.48

e. $996.88

Answer 1

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