1. Calculate the real interest rate per annum using the full Fisher equation if the nominal interest rate is 6% per annum and the inflation rate is 2% per annum.

A. 3.92%

B. 4.00%

C. 8.00%

D. 8.12%

5. Calculate the simple interest rate per to a nominal interest rate of 4% compounded monthly over a 24 period.

A. 3.33%

B. 4.00%

C. 4.16%

D. 6.67%

6. Michael made a deposit of $13,000 exactly 5 years ago into an account that pays a nominal

8% per annum compounded quarterly. Calculate the accumulated balance right

Michael does not contribute further deposits.

A. $14,353.05

B. $19,101.27

C. $19,243.18

D. $19,317.32

7. David plans to invest his savings over the years and is considering a number of savings account

. Which of the following interest rate specifications

?

A. 8.4% per annum compounded quarterly.

B. 8.5% per annum compounded annually.

C. 8% per annum compounded semi-annually.

D. 8.25% per annum compounded monthly.

8. Jenny is planning to buy a car 5 years from now at a price of $35,000 with cash. She decides

single deposit right now to fund for the purchase. Calculate the amount of deposit

nominal interest rate during the first three years is 12% per annum compounded monthly

the nominal interest rate is 7% per annum compounded annually.

A. $19,265.74

B. $21,366.38

C. $22,862.03

D. $24,954.52