68. You are considering a

29 Jun 68. You are considering a

Question
61. Suppose you deposited $5,000 in a bank account that pays 5.25% with daily compounding based on a 360-day year. How much would be in the account after 8 months, assuming each month has 30 days?

a. $5,178.09

b. $5,436.99

c. $5,708.84

d. $5,994.28

e. $6,294.00

62. Suppose you borrowed $12,000 at a rate of 9.0% and must repay it in 4 equal installments at the end of each of the next 4 years. How large would your payments be?

a. $3,704.02

b. $3,889.23

c. $4,083.69

d. $4,287.87

e. $4,502.26

63. Suppose you are buying your first condo for $145,000, and you will make a $15,000 down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be?

a. $741.57

b. $780.60

c. $821.69

d. $862.77

e. $905.91

64. Your uncle will sell you his bicycle shop for $250,000, with “seller financing,” at a 6.0% nominal annual rate. The terms of the loan would require you to make 12 equal end-of-month payments per year for 4 years, and then make an additional final (balloon) payment of $50,000 at the end of the last month. What would your equal monthly payments be?

a. $4,029.37

b. $4,241.44

c. $4,464.67

d. $4,699.66

e. $4,947.01

65. Suppose you borrowed $14,000 at a rate of 10.0% and must repay it in 5 equal installments at the end of each of the next 5 years. How much interest would you have to pay in the first year?

a. $1,200.33

b. $1,263.50

c. $1,330.00

d. $1,400.00

e. $1,470.00

66. You plan to borrow $35,000 at a 7.5% annual interest rate. The terms require you to amortize the loan with 7 equal end-of-year payments. How much interest would you be paying in Year 2?

a. $1,994.49

b. $2,099.46

c. $2,209.96

d. $2,326.27

e. $2,442.59:

67. Your bank offers to lend you $100,000 at an 8.5% annual interest rate to start your new business. The terms require you to amortize the loan with 10 equal end-of-year payments. How much interest would you be paying in Year 2?

a. $7,531

b. $7,927

c. $8,323

d. $8,740

e. $9,177

68. You are considering an investment in a Third World bank account that pays a nominal annual rate of 18%, compounded monthly. If you invest $5,000 at the beginning of each month, how many months would it take for your account to grow to $250,000? Round fractional months up.

a. 23

b. 27

c. 32

d. 38

e. 44

69. You are considering investing in a bank account that pays a nominal annual rate of 7%, compounded monthly. If you invest $3,000 at the end of each month, how many months will it take for your account to grow to $150,000?

a. 39.60

b. 44.00

c. 48.40

d. 53.24

e. 58.57

70. Your child’s orthodontist offers you two alternative payment plans. The first plan requires a $4,000 immediate up-front payment. The second plan requires you to make monthly payments of $137.41, payable at the end of each month for 3 years. What nominal annual interest rate is built into the monthly payment plan?

a. 12.31%

b. 12.96%

c. 13.64%

d. 14.36%

e. 15.08%