21.a

b.

c.

d.

e.

You want to buy a new house. The bank is willing to make you a 30-year loan at 8% compounded monthly for 90% of the value of the house. How much is your down- payment if the mortgage payments are $2500 per month? $37,856.53 $41,285.22 $254,435.43 $340,708.74 $367,259.27 You just learnt that you are going to receive $300 a year forever. In addition, this amount will increase at the rate of 5% forever. However, these payments will not begin until five years from today. What is the present value of these payments assuming a discount rate of 6%? 22,417.75 23,762.81 25,188.58 30,000.00 None of the above It is widely reported on the Internet that the island of Manhattan was purchased in the 17th century for a price of 60 Dutch guilders-roughly equal to $24 (US). Suppose that instead of purchasing Manhattan, the Dutch colonists had invested their $24 (US) in Europe at an average rate of 4.5% per year. If the $24 USD had been invested for exactly 385 years earning simple interest (i.e., without compounding), approximately how much would their investment now be worth? $440 $549,519,444 $9,240 $24.736,768 None of the above Which of the following statements is FALSE? Corporations are assumed to have perpetual lives and partnerships have limited lives. Shareholders have unlimited liability for the obligations of the corporation which represents an important legal risk that equity investors must consider. Double taxation of income is a disadvantage of the corporate form of business organization. Ownership in a corporation is represented by equity shares and this implies that ownership can readily be transferred from one person to another. None of the above You just turned 19 years old and want to go to Stages for the first time. Sadly, you have no money because you were forced to buy textbooks at school. Happily, you will receive $1,000 cash in exactly two months when your parents come to visit you in Kingston. If you obtain a short-term loan from FunnyMoneyMart at a stated interest rate of 3% per month, what is the largest amount you can borrow today if you intend to use all of your gift money to repay the debt in two months? $897.96 $1,060.90 $995.05 $942.60 None of the above