13. David Puddy went to Waltham Toyota shopping for a new car. The car dealership offered David two purchase options. David can (1) purchase a new car for $30,000 with a 1.80% annual interest rate and monthly payments for three years; or (ii) David can purchase the car for $25,000 (after receiving a $5,000 cash rebate) with a 6.60% annual interest rate and monthly payments for three years. Which deal is preferable for David? a. The 1.80% three-year loan. b. The 6.60% three-year loan with the rebate. c. Either deal is equally attractive. d. The answer is dependent upon how long David plans to keep the car. e. More information is needed to answer the question. 14. Bob Cobb wants to buy a small house in Tuscany for $333,760. His bank quoted him a 6.8% APR loan compounded quarterly for 30 years to buy the house. What is the effective interest rate on this loan? a. 7.03% b. 6.98% c. 6.53% d. 7.28% e. 6.80% 15. Jake Jarmel has decided that he wants to build enough retirement wealth that, if invested at 9% per year, will pro him with $2,700 monthly income for 30 years. To date, Jake has saved $15,000, but he still has 23 years until he retires. How much money does he need to contribute per month to reach his goal? a. $2,700.00 b. $366.66 c. $62.60 d. $237.77 e. $183.29 16. Susan Ross' Envelope Store, a fast-growing company, recently paid a dividend of $3.00 per share. The dividend is expected to increase at a rate of 20% for the next two years. Afterwards, a more stable 4% annual growth rate can be assumed. If a 10% discount rate is appropriate for this stock, what is its value today? a. $6.84 b. $68.73 c. $66.35 d. $43.97 e. $40.12