Question

1) You just received a loan offer from Green Loans. The company is offering you $5,000 at 5.3 percent interest. The monthly payment is only $100. If you accept this offer, how long will it take you to pay off the loan? A) 6.12 years B) 4.72 years C) 3.98 years D) 2.79 years E) 1.74 years

2) You will receive annual payments of $800 at the end of each year for 12 years. However, the first payment will be received in Year 3. What is the present value of these payments if the discount rate is 9 percent? A) $12,965.20 B) $7,879.96 C) $3,556.60 D) $4,821.63 E) $16,900.10

3) LoanShark LLC charges .85 percent interest per quarter. What rate of interest are its credit customers actually paying? A) 12.67 percent B) 1.69 percent C) 10.23 percent D) 3.44 percent E) 1.78 percent

Answer 1

1)

Hence, Correct option B) 4.72 years (56.62/12)