Future Value Given a 7.25 percent interest rate, compute the year 7 future value of deposits made in years 1, 2, 3, and 4 of $1,100, $1,300, $1,600, and $1,600. rev: 09_21_2012

$5,430.66

$6,783.08

$7,609.58

$7,032.64

Effective Annual Rate A loan is offered with monthly payments and a 9 percent APR. What's the loan's effective annual rate (EAR)?

8.38%

15.31%

9.38%

9.96%

Present Value of an Annuity Due If the present value of an ordinary, 2-year annuity is $5,800 and interest rates are 8 percent, what's the present value of the same annuity due?

$6,800

$5,800

$7,264

$6,264

Future Value of an Annuity What is the future value of a $510 annuity payment over 6 years if the interest rates are 5 percent?

$2,874.92

$3,468.98

$3,213.00

$683.45

Moving Cash Flow You are scheduled to receive a $560 cash flow in one year, a $860 cash flow in two years, and pay a $460 payment in three years. If interest rates are 11 percent per year, what is the combined present value of these cash flows?

$866.15

$1,538.85

$960.00

$1,420.00

Future Value At age 25 you invest $2,400 that earns 10.5 percent each year. At age 35 you invest $2,400 that earns 13.5 percent per year. In which case would you have more money at age 60?

At age 35 invest $2,400 at 13.5 percent.

At age 25 invest $2,400 at 10.5 percent.

Both yield the same amount at age 60.

There is not enough information to determine which case earns the most money at age 60.

Solving for Rates What annual rate of return is earned on a $3,900 investment when it grows to $8,300 in seventeen years?

2.13%

1.13%

4.29%

4.54%

Moving Cash Flows What is the value in year 3 of a $1,300 cash flow made in year 4 when interest rates are 8.6 percent?

$1,014.97

$1,188.20

$934.60

$1,197.05