ࡱ> NPM @ bjbj5*5* !<W@W@ ZZZZZZZFNNNNbF &. %%%%%%%$N'R)%Z %ZZ%3"3"3" ZZ%3" %3"3"ZZ3" `NN 3"S"L%0 &3"N*!N*3"nTZZZZN*Z3" 3" %%FFJ)" FFJBUAD 311Name Calculator Quiz - Fall 2000Section 1. (2 points) You need to have $30,000 in 5 years. How much to you have to have on deposit today if you can earn 8.25%? 2. (2 points) You invested $100,000 in an account 4 years ago. Currently, your account is worth $83,750. What rate of return have you earned? 3. (3 points) You want to be a millionaire when you retire in 35 years. If you can earn a 11% APR compounded monthly, how much do you have to invest each month? 4. (3 points) You have determined that you can afford $950 a month for house payments. If you plan to take out a 25 year mortgage and the bank will give you a 9.5% APR loan compounded monthly, how much can you afford to spend on a house? (Ignore taxes and points.) 5. (3 points) Find the EAR in each case below. Stated or APRCompounding periodEffective rate or EAR7%Quarterly10.5%Monthly6%Daily 6. (4 points) You have $10,000 on your credit card. You plan to make monthly payments of $200 until the balance is paid off. The interest rate on your credit card is 18% APR compounded monthly. A letter in the mail informs you that you are approved for a new credit card and balance transfers are subject to a 12% APR compounded monthly. How many months sooner will you pay off your bill? 7. (4 points) You want to buy a new car from Joes Motorworks for $25,000. The contract is in the form of a 48-month annuity at 7.5% APR. What will your monthly car payment be? 8. (4 points) You will receive $6,000 in one year and $7,000 in two years. What is the present value if the interest rate is 8% APR compounded quarterly? 9. (4 points) You want to purchase a house that costs $125,000. You will make monthly payments for 30 years and the bank quotes you an interest rate of 8.78% EAR. How much are your monthly mortgage payments? 10. (5 points) You are trying to choose between two investments. Both investments have upfront costs of $50,000. Investment A returns $75,000 in six years and Investment B returns $150,000 in eleven years. Which of these investments has the higher return? 11. (5 points) The present value of the following cash flows is $7,500. If the appropriate discount rate is 8.75%, what is the value missing cash flow (Year 2)? YearCash Flow1$2,0002?32,50042,300 12. (5 points) If the appropriate discount rate is 9.75%, what is the value of the following set of cash flows in year 5? YearCash Flow1$35,000255,000375,000495,000 13. (6 points) An insurance policy can be purchased for a baby, which pays $200,000 when they turn 65. To get this payment you must pay $450 on the childs 1st and 2nd birthday, $550 on the childs 3rd and 4th birthday and $650 on their 5th and 6th birthday. If the interest rate is 5.5% for the first six years and 7% thereafter, should you purchase the policy? 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