1. Cary's wonderful parents established a college savings plan for him when he was born. They deposited $50 into the account on the last day of each month. The account has earned 10% compounded monthly, tax-free. Now he's off to State U. What equal amount can they withdraw beginning today (his 18^th birthday) and each year for three additional years to spend on his education, assuming that the account now earns 7% annually.

Select one:

a. $9,486

b. $8,865

c. $30,028

d. $8,285

2.

What is the present value of the following perpetuities?

a. $200 per year discounted at 6% annually

b. $500 per year discounted at 9% annually

c. $1,000 per year discounted at 5% annually

d. $550 per year discounted at 8% annually

3.

What is the present value of an annuity of $120 received at the end of each year for 11 years? Assume a discount rate of 7%. The first payment will be received one year from today (round to nearest $1).

Select one:

a. $250

b. $900

c. $570

d. $400

4. Frank Zanca is considering three different investments that his broker has offered to him. The different cash flows are as follows:

Because Frank only has enough savings for one investment, his broker has proposed the third alternative to be, according to his expertise, "the best in town." However, Frank questions his broker and wants to calculate the present value of each investment. Assuming a 15% discount rate, what is Frank's best alternative?

If you want to have 1$2,500 in 57 months, how much money must you put in a savings account today? Assume that the savings account pays 4.5% and it is compounded quarterly (round to nearest $1).

Select one:

a. $8,459

b. $10,387

c. $11,129

d. $10,106

Auto Loans R Them loans you $24,000 for four years to buy a car. The loan must be repaid in 48 equal monthly payments. The annual interest rate on the loan is 9 percent. What is the monthly payment?

Select one:

a. $500.92

b. $563.82

c. $543.79

d. $597.24

A bond will pay $5,000 at maturity in 9 years. It also makes semiannual interest payments of $400 until maturity. If the discount rate is 7% compounded semiannually, what should be the market price of the bond?