1. Mike bought a car three years ago. He paid $45,000 and financed it for 5 years at 2% annual interest with monthly payments. He decided to buy a truck and sell his car. About how much is the loan balance on the car today?
$18,541.26
$18,173.98
$ 17,976.46
$17,385.94
2. Mary wants to spend $250,000 during each year in retirement. She wants the money to last for 30 years. She plans to invest $25,000 a year for 35 years and she expects all investments to earn at least 6% a year. Will she reach her goal of being able to spend $250,000 during retirement?
Yes; she will have exactly the right amount.
Yes; she will have about $169,372 more than she needs in her retirement account.
No; her retirement account will short about $655,338 (she will need that much more to reach her goal).
No; her account will be short about $81,000 (she will need about that much more to reach her goal.
3. Compute the expected portfolio return given:
Company Expected Return Weight
X -10% 30%
Y 30% 50%
Z 15% 20%
21%
18%
15%
-3%