Question

7. You just find your dream car and get an auto loan of $20,000 from a local bank. It requires fixed monthly payments over 5 consecutive years. The first monthly payment is due in one month. If the interest rate on the auto loan is 8%, calculate your monthly payment. (assume no down payment)

a. $326

b. $346

c. $366

d. $386

e. $406

8. Your local bank offers you a CD that if you deposit $1,000 today, you will receive $3,500 in 6 years. What is the interest rate your local offers?

a. 18%

b. 20%

c. 23%

d. 25%

e. 27%  

9. What will $1,000 be worth in two years if it is compounded continuously at an interest rate of 8%?

a. $1080.80

b. $1166.40

c. $1173.51

d. $1258.36

e. $1298.45

10. A scholarship service wants to set aside an amount today to cover a particular student’s college costs. The student will receive $15,000 per year for 4 years, beginning in year 2. What is the present value of the entire scholarship amount, assuming an interest rate of 8%?

a. $45826.55

b. $46001.76

c. $48991.25

d. $51336.48

e. $53845.22

Answer 1

The solutions are

Thanks