The going rate of interest on a 5-year treasury bond is 4.25%.You have one that will pay $3,000 five years from now. How much isthe bond worth today?

Select the correct answer.

a. $2,439.46

b. $2,445.66

c. $2,436.36

d. $2,448.76

e. $2,442.56

Your friend offers to pay you an annuity of $2,300 at the end ofeach year for 3 years in return for cash today. You could earn 5.5%on your money in other investments with equal risk. What is themost you should pay for the annuity?

Select the correct answer.

a. $6,205.25

b. $6,197.95

c. $6,190.65

d. $6,212.55

e. $6,183.35

A new investment opportunity for you is an annuity that pays$1,200 at the beginning of each year for 3 years. You could earn5.5% on your money in other investments with equal risk. What isthe most you should pay for the annuity?

Select the correct answer.

a. $3,415.58

b. $3,468.38

c. $3,450.78

d. $3,433.18

e. $3,397.98

Suppose you earned a $750,000 bonus this year and invested it at8.25% per year. How much could you withdraw at the end of each ofthe next 20 years?

Select the correct answer.

a. $77,806.48

b. $77,809.58

c. $77,812.68

d. $77,815.78

e. $77,803.38

What's the present value of $1,650 discounted back 5 years ifthe appropriate interest rate is 6%, compounded monthly?

Select the correct answer.

a. $1,228.66

b. $1,217.86

c. $1,220.56

d. $1,223.26

e. $1,215.16

Suppose your credit card issuer states that it charges a 14.75%nominal annual rate, but you must make monthly payments, whichamounts to monthly compounding. What is the effective annualrate?

Select the correct answer.

a. 16.24%

b. 15.34%

c. 14.89%

d. 15.79%

e. 16.69%

Billy Thornton borrowed $180,000 at a rate of 7.25%, simpleinterest, with interest paid at the end of each month. The bankuses a 360-day year. How much interest would Billy have to pay in a30-day month?

Select the correct answer.

a. $1,087.50

b. $1,089.60

c. $1,091.70

d. $1,083.30

e. $1,085.40