Câu Hỏi 1

On June 1, you borrowed $220,000 to buy a house. The mortgage rate is 8.25
percent. The loan is to be repaid in equal monthly payments over 15 years. The first
payment is due on July 1. How much of the second payment applies to the principal
balance? (Assume that each month is equal to 1/12 of a year.)
a. $721.14
b. $1,358.56
c. $2,056.70
d. $626.08
e. $1,453.38
Câu Hỏi 2
You are considering two loans. The terms of the two loans are equivalent with the
exception of the interest rates. Loan A offers a rate of 7.75 percent, compounded
daily. Loan B offers a rate of 8 percent, compounded semi-annually. Which loan
should you select and why?
a. A; the effective annual rate is 8.06 percent
b. B; the effective annual rate is 8.16 percent
c. A; the annual percentage rate is 7.75 percent
d. The loans are equivalent offers so you can select either one
e. B; the annual percentage rate is 7.68 percent
Câu Hỏi 3
Atlas Insurance wants to sell you an annuity which will pay you $1,600 per quarter for
25 years. You want to earn a minimum rate of return of 6.5 percent. What is the most
you are willing to pay as a lump sum today to buy this annuity?
a. $72,008.24
b. $88,927.59
c. $78,818.41
d. $83,008.80
e. $74,208.16
Câu Hỏi 4
You just settled an insurance claim. The settlement calls for increasing payments
over a 10-year period. The first payment will be paid one year from now in the
amount of $10,000. The following payments will increase by 4.5 percent annually.
What is the value of this settlement to you today if you can earn 8 percent on your
investments?
a. $76,408.28
b. $84,141.14
c. $85,008.16
d. $80,192.76
e. $82,023.05
Câu Hỏi 5
Kingston Development Corp. purchased a piece of property for $2.79 million. The firm
paid a down payment of 15 percent in cash and financed the balance. The loan terms
require monthly payments for 15 years at an annual percentage rate of 7.75 percent,
compounded monthly. What is the amount of each mortgage payment?
a. $23,419.97
b. $25,301.16
c. $23,607.11
d. $22,322.35
 e. $24,878.15
Câu Hỏi 6
You estimate that you will owe $45,300 in student loans by the time you graduate.
The interest rate is 4.25 percent. If you want to have this debt paid in full within ten
years, how much must you pay each month?
a. $514.28
b. $536.05
c. $411.09
d. $464.04
e. $542.50
Câu Hỏi 7
You have some property for sale and have received two offers. The first offer is for
$89,500 today in cash. The second offer is the payment of $35,000 today and an
additional $70,000 two years from today. If the applicable discount rate is 11.5
percent, which offer should you accept and why?
a. It does not matter which offer you accept as they are equally valuable
b. You should accept the $89,500 today because it has the higher net present value
c. You should accept the $89,500 today because it has the lower future value
d. You should accept the first offer as it has the greatest value to you
e. You should accept the second offer because it has the larger net present value
Câu Hỏi 8
The Wine Press is considering a project which has an initial cash requirement of
$187,400. The project will yield cash flows of $2,832 monthly for 84 months. What is
the rate of return on this project?
a. 7.56 percent
b. 7.04 percent
c. 6.97 percent
d. 7.41 percent
e. 7.28 percent
Câu Hỏi 9
You just won a national sweepstakes! For your prize, you opted to receive never-
ending payments. The first payment will be $12,500 and will be paid one year from
today. Every year thereafter, the payments will increase by 3.5 percent annually.
What is the present value of your prize at a discount rate of 8 percent?
a. $166,666.67
b. $248,409.19
c. $277,777.78
d. $300,000.00
e. $291,006.12
Câu Hỏi 10
Will has been purchasing $25,000 worth of New Tek stock annually for the past 15
years. His holdings are now worth $598,100. What is his annual rate of return on this
stock?
a. 6.32 percent
b. 6.36 percent
c. 6.29 percent
d. 6.24 percent
e. 6.13 percent
Câu Hỏi 11
Holiday Tours (HT) has an employment contract with its newly hired CEO. The
contract requires a lump sum payment of $10.4 million be paid to the CEO upon the
successful completion of her first three years of service. HT wants to set aside an
equal amount of money at the end of each year to cover this anticipated cash outflow
and will earn 5.65 percent on the funds. How much must HT set aside each year for
this purpose?
a. $3,277,973
b. $3,466,667
c. $3,184,467
d. $3,318,190
e. $3,006,409
Câu Hỏi 12
Samuelson Engines wants to save $750,000 to buy some new equipment four years
from now. The plan is to set aside an equal amount of money on the first day of each
quarter starting today. The firm can earn 4.75 percent on its savings. How much does
the firm have to save each quarter to achieve its goal?
a. $43,911.08
b. $43,419.29
c. $42,337.00
d. $42,969.70
e. $43,192.05
Câu Hỏi 13
Stephanie is going to contribute $300 on the first of each month, starting today, to
her retirement account. Her employer will provide a 50 percent match. In other
words, her employer will contribute 50 percent of the amount Stephanie saves. If
both Stephanie and her employer continue to do this and she can earn a monthly
rate of 0.90 percent, how much will she have in her retirement account 35 years from
now?
a. $2,123,007
b. $2,068,418
c. $1,936,264
d. $1,943,286
e. $1,989,312
Câu Hỏi 14
Nadine is retiring at age 62 and expects to live to age 85. On the day she retires, she
has $402,000 in her retirement savings account. She is somewhat conservative with
her money and expects to earn 6 percent during her retirement years. How much can
she withdraw from her retirement savings each month if she plans to spend her last
penny on the morning of her death?
a. $2,688.77
b. $2,219.46
c. $2,416.08
d. $2,147.78
e. $1,909.92
Câu Hỏi 15
Western Bank offers you a $21,000, 9-year term loan at 8 percent annual interest.
What is the amount of your annual loan payment?
a. $3,228.50
 b. $3,666.67
c. $4,311.07
d. $3,901.18
e. $3,361.67
Câu Hỏi 16
You have $5,600 that you want to use to open a savings account. There are five
banks located in your area. The rates paid by banks A through E, respectively, are
given below. Which bank should you select if your goal is to maximize your interest
income?
a. 4.61 percent, compounded annually
b. 4.10 percent, compounded continuously
c. 4.15 percent, compounded monthly
d. 4.57 percent, compounded semi-annually
e. 4.25 percent, compounded quarterly
Câu Hỏi 17
You are considering two savings options. Both options offer a 7.4 percent rate of
return. The first option is to save $900, $1,500, and $3,000 at the end of each year
for the next three years, respectively. The other option is to save one lump sum
amount today. If you want to have the same balance in your savings account at the
end of the three years, regardless of the savings method you select, how much do
you need to save today if you select the lump sum option?
a. $3,410
b. $3,530
c. $4,780
d. $4,560
e. $3,600

Câu Hỏi 18
You are borrowing $17,800 to buy a car. The terms of the loan call for monthly
payments for 5 years at 8.6 percent interest. What is the amount of each payment?
a. $287.71
b. $291.40
c. $301.12
d. $366.05
e. $342.76
Câu Hỏi 19
Your car dealer is willing to lease you a new car for $245 a month for 48 months.
Payments are due on the first day of each month starting with the day you sign the
lease contract. If your cost of money is 6.5 percent, what is the current value of the
lease?
a. $10,386.99
b. $12,197.74
c. $13,008.31
d. $10,331.03
e. $12,203.14
Câu Hỏi 20
You just acquired a mortgage in the amount of $249,500 at 6.75 percent interest,
compounded monthly. Equal payments are to be made at the end of each month for
thirty years. How much of the first loan payment is interest? (Assume each month is
equal to 1/12 of a year.?
 a. $1,403.44
b. $925.20
c. $1,548.60
d. $1,511.21
e. $1,206.16
Câu Hỏi 21
One year ago, Deltona Motor Parts deposited $16,500 in an investment account for
the purpose of buying new equipment three years from today. Today, it is adding
another $12,000 to this account. The company plans on making a final deposit of
$20,000 to the account one year from today. How much will be available when it is
ready to buy the equipment, assuming the account pays 5.5 interest?
a. $58,021
b. $53,919
c. $56,792
d. $53,408
e. $56,211