1

To save $20,000 toward a car, Jack wants to deposit 4 equal year-end amounts to his savings account. The yearly instalment amount given an effective annual interest rate of 12% compounding monthly is calculated using:

Select one:

a.

=PMT(rate,nper,pv,[fv],[type])

b.

=IPMT(rate,per,nper,pv,[fv],[type])

c.

=NPER(rate, nper, pmt, [fv], [type])

d.

=PV(rate,nper,pmt,[fv],[type])

2.

You invest in your savings account $2373 today, $1800 at the end of year one and $3200 at the end of year two. If the interest rate is 12.6% per annum, compounded quarterly, then the amount you will have in exactly three years is closest to:

a.

$8457.00

b.

$8511.88

c.

$9372.47

d.

9273.14

3.

You invest in your savings account $2088 today, $2200 at the end of year one and $3800 at the end of year three. If the interest rate is 9.4% per annum, compounded annually, then the amount you will have in exactly three years is closest to:

a.

$9166.94

b.

$8878.24

c.

$8940.70

d.

9524.14

4.

A bank offers personal loans at 14.4%p.a compounding monthly. The effective annual rate of interest (EAR) is ( to the nearest two decimal places):

a.

14.92%

b.

1.20%

c.

15.20%

d.

15.39%