Question
1a.) Master Card and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is
1a.) Master Card and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 20.59%, with interest paid monthly, what is the card's EFF%?
18.58%
19.56%
20.54%
21.57%
22.65%
b. You want to go to Europe 5 years from now, and you can save $3,100 per year, beginning one year from today. You plan to deposit the funds in a mutual fund that you think will return 15.87% per year. Under these conditions, how much would you have just after you make the 5th deposit, 5 years from now?
$18,369
$19,287
$20,251
$21,264
$22,327
c. Your uncle is about to retire, and he wants to buy an annuity that will provide him with $71,249.98 of income a year for 20 years, with the first payment coming immediately. The going rate on such annuities is 5.25%. How much would it cost him to buy the annuity today?
$ 825,835
$ 869,300
$ 915,052
$ 963,213
$1,011,374
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