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3. You are borrowing $5,240 to buy a car. The terms of the loan call for monthly payments for 5 years at a 5.00 percent interest. What is the amount of each payment?

1. $76.50
2. $98.89
3. $77.05
4. $97.09
5. $98.61

10. You are scheduled to receive annual payments of $10,200 for each of the next 22 years. The discount rate is 8.0 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year?

1. 10,200.00
2. 8,821.57
3. 8,323.81
4. 9,859.32
5. 11,016.00

11. What is the future value of $500 in 25 years assuming an interest rate of 13 percent compounded semiannually?

1. $645,60
2. $10,615.27
3. 11,070.67
4. $11,653.34
5. $763.69

12. The appropriate discount rate for the following cash flows is 12 percent compounded quarterly

Year cash flow

1. $900
2. 700
3. 0
4. 1,100

Required:

What is the present value of the cash flows?

1. $2,060.68
2. $414.07
3. $2,037.74
4. $2,078.5
5. $1,996.99

14.. Phil can afford $160 a month for 5 years for a car loan. If the interest rate is 5.1 percent, how much can he afford to borrow to purchase a car?

A. $7,443.22

B. $8,457.96

C. $8,448.00

D. $8,627.12

E. $9,600.00

16. What is the present value of $1,800 per year, at a discount rate of 12 percent, if the first payment is received 4 years from now and the last payment is received 22 years from now?

1. $2,453.15
2. $9,437.07
3. $9,248.32
4. $13,258.40
5. $9,288.31

17. You are considering an annuity which costs $107,254 today. The annuity pays $7,700 a year at an annual interest rate of 6.0 percent. What is the length of the annuity time period?

A. 45.47 years

B. 16.43 years

C. 32.00 years

D. 29.90 years

E. 31.00 years

18. Your car dealer is willing to lease you a new car for $289 a month for 60 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 3.9 percent, what is the current value of the lease?

A. $15,782.07

B. $15,756.51

C. $16,071.07

D. $16,019.95

E. $15,730.95

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