1) What is the future value of $1800 invested today at 18% interest in 30 years with interest compounded quarterly?
A. $300,154.84
B. $9.15
C. $354,182.71
D. $258,067.15
E. $394,832.66
2) What is the present value of $6700 received 14 years from now using on the 11% interest or discount read with interest compounded quarterly?
A. $1,554.37
B. $1,321.20
C. $30,609.58
D. $1,466.53
E. $1,438.69
3) What is the future value of $300 deposited at the beginning of each month for 18 years earning 4% interest?
A. $5,574.27
B. $91,193.59
C. $94,993.33
D. $46,293.61
E. $94,677.73
4) You are negotiating a professional sports contract pension payment. Upon your retirement you have been given two choices: $500,000 per year for 5 years (a total of $2,500,000) or $250,000 per year for 12 years (a total of $3 million). Which pension has the highest value? Assume payments occur at the end of each year, and use a 7% interest rate.
A. $500,000/5 year pension PV = $7,510,961.92 $250,000/12 year pension PV = $3,821,204.20
B. $500,000/5 year pension PV= $2,500,000 $250,000/12 year pension PV= $3,000,000
C. $500,000/5 year pension PV=$2,050,098.72 $250,000/12 year pension PV= $1,985,671.57
D. $500,000/5 year pension PV = $7,019,590.58 $250,000/12 year pension PV= 3,571,218.88
E. $500,000/5 year pension PV= $2,193,605.63 $250,000/12 year pension PV = $2,124,668.58
5) What is the monthly car payment on a 6 year $23,000 car loan at 5.5% annual interest?
A. $4,364.09
B. $4,604.12
C. $4,592.90
D. $375.77
E. $374.06
6) If you have $15,000 today and save $1,250 per month at the end of the month while earning an annual interest rate of 6.5% how many months would it take to accumulate $350,000?
A. 181
B. 13
C. 152
D. 14
E. 159
7) Assume the following information for car note: original loan amount = $27,500 annual interest rate = 7.8% term of the loan= 36 months. How much principal and interest was paid in the first year, and what is the principal balance on the loan after year one?
A. $7,733.19 of principal; $1,718.18 of interest; balance due $19,766.81
B. $8,463.98 of principal; $1,846.66 of interest; balance due $19,036.02
C. $7,670.13 of principal; $1,720.20 of interest; balance due $19,829.87
D. $8,586.89 of principal; $1,657.15 of interest; balance due $18,913.11
E. $8,518.93 of principal; $1,791.65 of interest; balance due $18,300.60
8) What is the net present value (NPV) and internal rate of return (IRR) of spending $275,000 today on medical school which will allow you to earn $50,000 more a year for the next 35 years assuming you could invest this money elsewhere and earn 16%?
A. NPV= $35,766.91 IRR= 18.1%
B. NPV=$310,766.91 IRR= 94%
C. NPV= ($310,766.91); IRR = (94%)
D. NPV= $1,116.153.09 IRR= 847%
E. NPV= ($35,766.91); IRR= (18.1%)
9) What is the effective interest rate assuming the following:
Annual rate= 13% pmt/yr = 52
A. 13.86%
B. 13.88%
C. 13.80%
D. 13.65%
10) Assume you're a professional athlete. You have been offered the following contract: bonus today= $5 million Annual salary (one payment at the end of the year) = $1 million for 5 years. What is the present value of the contract if you use a 10% discount rate?
A. $4,169,865
B. $3,790,787
C. $9,169,865
D. $8,678,431
E. $8,790,787