13. Your grandparents put $1,000 into a savings account for you when you were born 20 years ago. This account has been carning interest at a compound rate of 7 percent . What is its value today? a. $3,870 b. $3,026 c. $1,967 d. $3,583 14. What would you be willing to pay today to receive $ 5,000 at the beginning of each year for the next 10 years if interest is earned at a rate of 8% compounded annually? a. $78,228 b. $34,656 c. $36,235 d. $33,551 15. When a loan is amortized over a five year term, the rate of interest is reduced each year b. amount of interest paid is reduced each year c. payment is reduced each year d. balance is paid as a balloon payment in the fifth year 16. You want to purchase a boat that costs $40,000. You want to finance as much of the purchase as possible with a 5-year bank loan at 12% compounded monthly, but can only afford loan payments of $750 per month. How much will you need as a down payment to buy the boat? (Round to the nearest dollar) a. S6,284 b. $4,637 c. $3,523 d. $5,147 17. You are considering buying a new car. The sticker price is $15,000 and you have $2,000 to put toward a down payment. If you can negotiate a nominal annual interest rate of 10% and you wish to pay for the car over a 5-year period, what are your monthly car payments? a $285.78 b. $216.67 c. $252,34 d. $318.71 c. $276.21 18. Which of the following cash flows has the highest present value (PV) at a 15 percent discount rate? a $1,150 received one year from today b. $2,000 received 5 years from today c. $300 received every year (at the end of the year) for 5 years d. $200 received every year (at the end of the year) for 10 years Page 4 of 12