1.

You are planning to save for retirement over the next 25 years. To do this, you will invest $600 a month in a stock account and $300 a month in a bond account. The return of the stock account is expected to be 10 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a return of 8 percent.

How much can you withdraw each month from your account assuming a 25-year withdrawal period?

Multiple Choice

• $92,988.25

• $418,868.59

• $7,594.04

• $7,904

• $7,749.02

2.

You need a 20-year, fixed-rate mortgage to buy a new home for $250,000. Your mortgage bank will lend you the money at a 6.6 percent APR for this 240-month loan. However, you can afford monthly payments of only $950, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment.

How large will this balloon payment have to be for you to keep your monthly payments at $950?

Multiple Choice

• $479,385.24

• $460,947.35

• $108,924.29

• $123,581.46

• $447,118.93

3.

The Nashville Geetars, a professional foosball team, has just signed its star player Harold "The Wrist" Thornton to a new contract. One of the terms requires the team to make a lump sum payment of $13.33 million to the The Wrist exactly 11 years from today. The team plans to make equal annual deposits into an account that will earn 5.08 percent in order to fund the payment. How much must the team deposit each year?

Multiple Choice

• $1,211,818.18

• $1,611,533.39

• $1,658,251.86

• $934,369.39

• $889,198.13