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9. Today, Izzy Mandelbaum charged $9,300 on his credit card to purchase some furniture. The annual interest rate on his credit card is 13.8%, compounded
9. Today, Izzy Mandelbaum charged $9,300 on his credit card to purchase some furniture. The annual interest rate on his credit card is 13.8%, compounded monthly. How many years will it take Izzy to pay off this credit card debt assuming that he does not charge anything else to the credit card and makes $175 monthly payments? a. 3.45 years. b. 7.31 years. c. 82.61 years. d. 6.88 years. e. 6.03 years. 10. The common stock of Del Boca Vista Deliveries sells for $36.20 per share. The stock is expected to pay $2.10 per share next year when the annual dividend is paid. The firm has established a pattern of increasing its dividends by 4% annually and expects to continue to do so. What is the market rate of return on this stock? a. 9.80% b. 10.03% c. 9.42% d. 10.74% e. 11.88% 11. Jackie Chiles has deposited $25,000 for the first year of his daughter's college education. His daughter will start college 15 years from today. How much compound interest will Jackie earn before his daughter's freshman year, if he earns 6 percent annually, with monthly compounding on his deposit? a. $36,352.34 b. $22,500.00 c. $13,852.34 d. $34,913.95 e. $12,413.95 12. Bookman Security Corporation just decided to save $2,000 per month for the next 8 years as an emergency fund for bad economic times. The money will be set aside in a separate savings account which pays 3.0% annual interest, compounded monthly. Each deposit will be made at the beginning of the month, with the first deposit made today. How much money will Bookman have at the end of 8 years? a. $216,694.77 b. $17,784.67 c. $170,509.21 d. $170,935.48 e. $217,236.51
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