ASSESSMENT 5. You want to buy a condo 5 years from now, and you plan to save $3,000 per year, beginningat the end of each year. You will make 5 deposits in an account that pays 6 % interest. Under these assumptions, how much will you have 5 years from today? a. $16,110,34 b. $16,911.28 c. $17,513.68 d. $15,976.84 e. $18,349.15 6. You have the opportunity to buy a perpetuity that pays $1,000 annually. Your required rate of return on this investment is 15 percent. How much is the present value of this perpetuity? a. $5,000,00 b. $6,000,00 c. $6,666.67 d. $7,500.00 e. $8,728.50 Which of the following is correct? 7. a. The present value of a 5-year annuity due will always be less than the present value of a 5-year ordinary annuity b. If a loan has a nominal rate of 10 percent, then the effective rate will always be less than 10 percent. c. If there is annual compounding, then the effective annual rate and nominal rates of interest are all the same. d. None of the statements above are correct. You have $1,000 that you would like to invest.. You have 2 choices: Savings account A which earns 10% compounded annually, or savings account B which earns 9.8 % compounded monthly. Which would you choose and why? 8. Account A because it has a higher effective annual rate. b. . Account A because the future value in one year is lower. Account B because it has a higher effective annual rate. Account B because the future value in one year is lower. . d. You plan to borrow $35,000 at a 7.5 % annual interest rate. The terms require you to amortize the loan with 7 equal end-of-year payments. By how much would you pay down (reduce) the principal in the first year?? 9. a. $2,625.00 b. $3,099.46 c. $3,983.01 d. $4,326.27 e. $4,442.59