13) You invest $15,000 at an annual rate of 8.25% for one year. What is the difference in interest earned if you invest this money on a monthly basis instead of an annual basis?

Answer: Show your work

20) You know that regular tax-deferred investments are a popular investment choice for many people preparing for retirement. Did you know that if you invest $2,000 today and at the end of every year for 40 years at an annual rate of 10% that you will have grown your portfolio to a value of $975,704 at the end of that time? How much of that future value dollar amount comes from the $2,000 investment you made today?

A) $975,704

B) $885,185

C) $23,798

D) $90,519

Answer: Show your work

24) RC Inc. just issued zero-coupon bonds with a par value of $1,000. If the bond has a maturity of 15 years and a yield to maturity of 10%, what is the current price of the bond if it is priced in the conventional manner?

A) $1,000

B) $239.39

C) $231.38

D) This question cannot be answered because the coupon payment information is missing.

Answer: Show your work

26) Snake River Power Inc. has $1,000 par value, twenty-year, 6% annual coupon bonds, outstanding currently selling for $696.25. What is the yield to maturity on these bonds? Use a calculator for your answer.

Answer: Show your work

29) Your investment advisor informs you that you do not need to pay a fee for his services. Instead, he invests your money for one month and keeps all of the proceeds before investing it for you. If your advisor makes and keeps a 2% return on your investment, what is his EAR if the earnings rate could be extrapolated for one year?

A) 2.00%

B) 24.00%

C) 26.82%

D) 126.82%

Answer: Show your work