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Tools Window Help TVMI page To 231 2-FIN3301 LAYACHire.pdf (page 2 of 3) Exercise 8 You plan to deposit in your savings account a certain amount per month for 17 months starting in one month. How much should you deposit each month if you plan to have $3000 right after making the last deposit and you earn interests at an APR=4.74%? (5 pts) (A) $229.46 (B) $176.47 [C) $170.96 (D) $199.56 Exercise 9 Mrs. White is about to retire and her firm has just sent her the following three offers: Offer 1: Pay her or her beneficiaries $1200 per month for 240 months starting the time she retires. Offer 2: Pay her or her beneficiaries $1170 per month for 250 months starting one month after she retires. Offer 3: Pay her or her beneficiaries $1140 per month for 260 months starting in 6 months after she retires. Rank the three offers from best to worst if the APR = 2.34%. (15 pts) (D) 2 Best: Second best: Worst: (A) 1 2 3 (B) 1 3 2 (C) 2 1 3 (E) 3 1 2 (F) 3 2 1 3 1 Meeti atv MacBook Pro ( . View Go Tools Window Help Tue 230 2-FIN3301 LAYACHI.pdf (page 3 of 31 Mr. Basmajian is about to retire and his firm has just sent him the following three offers: Offer 1: Pay him or his beneficiaries $1200 per month for 220 months starting the time he retires. Offer 2. Pay him or his beneficiaries $1190 per month for 225 months starting one month after he retires. Offer 3: Pay him or his beneficiaries $1180 per month for 230 months starting in 5 months after he retires. Rank the three offers from best to worst if the APR7.02%. (15 pts) (A) 1 2 3 Best: Second best: Worst: (B) 1 3 2 (C) 2 1 3 (D) 2 3 1 (E) 3 1 2 (F) 3 2 1 I Exercise 11 Mr. Goodey is about to retire and his firm has just sent him the following three offers: Offer 1: Pay him or his beneficiaries $18000 per year forever starting the time he retires. Offer 2: Pay him or his beneficiaries 23 annual payments growing at 6.93% with the first payment being $19000 and will be made one year after he retires. Offer 3: Pay him or his beneficiaries Infinite annual payments growing at 1.78% with the first payment being $18000 and will be made in 7 years after he retires. Rank the three offers from best to worst if the APR = 7.11% (15 pts) Meeting now Best: Second best: Worst: (A) 1 2 3 (B) 1 3 2 IC) 2 1 3 (D) 2 3 1 (E) 3 1 2 (F) 3 2 1 MacBook Pro U * $ 4 8 7 > 0 3 5 6 00 9 0 W E R T U Y Tools Window Help B3 Tue 2 2-FIN3301 LAYACHI.pdf (page 3 of 3) Offer 3: Pay him or his beneficiaries infinite annual payments growing at 1.78% with the first payment being $18000 and will be made in 7 years after he retires. Rank the three offers from best to worst if the APR = 7.11%. (15 pts) Best: Second best: Worst: (A) 1 2 3 (B) 1 3 2 2 1 3 (D) 2 3 1 (E) 3 1 2 (F) 3 2 1 Exercise 12 You work for a bank that wants to advertise the following deal: Pay us $180 per month for 110 months starting now and we will pay you $X per month forever starting the month after you make the last payment. What is the maximal value that X can have so that the deal is profitable for the bank if the APR = 8.64% ? (10 pts) (A) $216.3 (B) $165.2 [C) $232 (D) $203.1 End of Exam Meeting now MacBook Pro D 3 $ & 7 8 0 9 6 3 4 5 O R E T Y U

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