37. The interest rate is 8 percent. What is the future value? A beneficial. $58,471. B. $62,440. C. $67,435. D. $72,435.
38. Ambrin Corp. expects to receive $2,000 per year for 10 years and $3,500 per year for the next 10 years. What is the present value of this 20 year cash flow? Use an 11% discount rate. An effective. $19,033 B. $27,870 C. $32,389 D. none of these
39. Dr. J. wants to buy a Dell computer which will cost $2,788 four years from today. He would like to set aside an equal amount at the end of each year in order to http://datingranking.net/fr/brancher accumulate the amount needed. He can earn 7% annual return. How much should he set aside? A beneficial. $ B. $ C. $ D. $
40. Mr. Fish wants to build a house in 10 years. He estimates that the total cost will be $170,000. If he can put aside $10,000 at the end of each year, what rate of return must he earn in order to have the amount needed? A. Between 11% and 12% B. Between 8% and 9% C. 17% D. None of these
41. The shorter the length of time between a present value and its corresponding future value, A. the lower the present value, relative to the future value. B. the higher the present value, relative to the future value. C. the higher the interest rate used in the present-valuation. D. none of these.
42. A dollar today is worth more than a dollar to be received in the future because A. risk of nonpayment in the future. B. the dollar can be invested today and earn interest. C. inflation will reduce purchasing power of a future dollar. D. None of these.
43. Mr. Darden is selling his house for $165,000. He bought it for $55,000 nine years ago. What is the annual return on his investment? A. 3% B. Between 14% and 16% C. 13% D. None of these
44. Increasing the number of periods will increase all of the following except A. the present value of an annuity. B. the present value of $1. C. the future value of $1. D. the future value of an annuity.
45. Joe Nautilus has $120,000 and wants to retire. A. 12% B. Between 12% and 13% C. 14% D. Greater than 15%
46. You will deposit $2,000 today. It will grow for 6 years at 10% interest compounded semiannually. The annual interest rate is 8%. Your annual withdrawal will be: A. $2,340 B. $4,332 C. $797 D. $1,085
47. Carol Thomas will pay out $6,000 at the end of the year 2, $8,000 at the end of year 3, and receive $10,000 at the end of year 4. With an interest rate of 13 percent, what is the net value of the payments vs. receipts in today’s dollars? A. $ 7,326. B. $10,242. C. $16,372. D. $ 4,112.
48. John Doeber borrowed $125,000 to buy a house. His loan cost was 11% and he promised to repay the loan in 15 equal annual payments. How much are the annual payments? A. $3,633 B. $9,250 C. $13,113 D. $17,383
49. John Doeber borrowed $125,000 to buy a house. His loan cost was 11% and he promised to repay the loan in 15 equal annual payments. What is the principal outstanding after the first loan payment? A. $121,367 B. $123,088 C. $107,617 D. None of these
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