1. Ben intends to buy a car in exactly three years from now for $25,000. He deposits a set amount into his bank account at the end of each month. If the account accumulates 8% p.a. interest compounded monthly, how much does Ben need to deposit at the end of each month?

a. $493.39

b. $535.35

c. $592.07

d. $617.49

2. You have just paid $5000 to receive $200 per year in perpetuity, what is the implied interest rate?

a. 3%

b. 5%

c. 4%

d. 6%

3. A car dealer offers to sell you a car for $3,000 now and $4,000 at the end of each of the next two years. What is the effective price of the car assuming that you can invest your money at 5% p.a. interest rate?

a. 10333.57

b. 10437.64

c. 9748.65

d. 9940.61

4. You bought your first house on a 20-year loan with BankAble today. You borrowed $250 000 and your loan requires monthly payments. The bank charges an interest rate of 6.5% p.a. compounded monthly. If it is an amortized loan, how much are your monthly payments?

a. 541.08

b. 15000.01

c. 1863.93

d. 44638.51

5. Betty just got her first large bonus and wants to set up a fund that will automatically withdraw $300 per year in perpetuity and donate it to carbon mitigation and adaptation projects. If the account earns 3%p.a., how much does she need to put in her account?

a. 100000

b. 10000

c. 30000

d. 3000

6. Your uncle is saving for his retirement. He started saving on his 30th birthday and plans to retire when he is 67. If he has been depositing $150 a fortnight, in an account that pays 6% compounded fortnightly, what does he have in his account when he turns 67? Assume his first payment was made a fortnight after his 30th birthday.

a. 5 807.19

b. 21 412.24

c. 401 809.24

d. 531 947.80