May B. Wiser wants to buy a house in five years and she opens a savings account that pays an annual rate of 4 percent, monthly compounding. Her dream home will cost $150,000 and she needs ten percent of the price for a down payment. How much must she save each month?

• A. $230.79
• B. $226.25
• C. $2,769.41
• D. $276.25

2.

You bought your house six years ago for $120,000 and sold it today for $160,800. What is your rate of return?

• A. 4.99%
• B. 8.00%
• C. 5.67%
• D. 4.88%

3Which of the following is NOT a valid theory that attempts to explain the shape of the yield curve ?

• A. the Fisher Effect theory
• B. the market segmentation theory
• C. the liquidity preference theory
• D. the unbiased expectations theory

4.You are hoping to buy a mansion in Ellicott City in 13 years. Your down payment amount will be approximately $140,000 (10% of the cost of your mansion). How much must you set aside in an account that pays an annual interest rate of 14% today (to save for the down payment)?

• A. $4810.59
• B. $25,489.7
• C. $520.00
• D. $42300.87

5.How much must be invested today in order to generate a 10-year annuity of $100 per year, with the first payment one year from today, at an interest rate of 12%?

• A. $404.78
• B. $437.35
• C. $304.78
• D. $565.0

6. Katy P. wants to open up a soda manufacturing plant. She calls around and finds out that it will cost $1,348,480 approximately to open up the plant. However she does not have enough money right now, and so is thinking of opening up the plant 5 years down the road. She comes to you for some financial help. If she earns 15% (compounded annually. on her investment, how much (APPROX) does Katy have to save up per year for the next five years to be able to open the soda manufacturing plant? (assume that the cost of setting up a plant stays flat in the next 5 years.)

• A. $200,000
• B. $222,000
• C. $225,000
• D. $250,000
• E. $265,000

7. Approximately how much must be saved today for retirement in order to withdraw $10,000 per year for the next 20 years if the balance earns 12% annually, and the first payment occurs one year from now?

• A. $74,694.44
• B. $50,670.49
• C. $65,694.44
• D. $83,150.00