PLEASE SHOW WORK

1. 12 years ago, a commercial building was purchased for $30,000. What would the selling price be necessary to recover the investment assuming an annual rate of 12% was desired in addition to the investment? (assume annual compounding and no selling costs)

• A) $7,000
• B) $73,000
• C) $120,000
• D) $116,879

2. What will the purchasing power of $1 be in 50 years if inflation continues at an annual compound rate of 4%?

• A) $0.14
• B) $7.11
• C) $0.50for
• D) $0.12

3.You are buying $62,000 house for 10% down, with the rest financed at 11.75% for 30 years with fixed monthly budget payments. What is you monthly loan payment?

• A) $514.95
• B) $613.98
• C) $563.25
• D) $518.11

4.If you purchase a house today for $175,000, what will be your mortgage payment if you paid 15% down and borrowed the balance for 30 years at 9% compounded monthly?

• A) $1,408
• B) $1,419
• C) $1,207
• D) $1,197

5.What is the present value of an ordinary annuity of $1,000 payable at the end of each year for 12 years discounted at 7.15% annum?

• A) $7,880
• B) $5,239
• C) $7,735
• D) $1,197

6.A real estate investment is expected to return to its owner $3,500 per year for 16 years after expenses. At the end of year 16, the property is expected to be sold at $49,000. Assuming the required rate of return is 14% for investments with this degree of risk, what is the net present value of this property if the purchase price is $28,000 today?

• A) -$51
• B) $27,949
• C) -$90
• D) $27,210

7.An investor bought a golf course today for $50,000. The lot sold for $100,000 five years ago. If the investor sells the lot 5 years from noe at 3% annual compound appreciation rate, what will it be worth?

• A) $57,964
• B) $115,927
• C) $67,196
• D) $57,500

8.If you deposit $100 at the end of each month into a local bank which pays you 2% per year compounded monthly. What will be the balance in your account at the end of year 1?

• A) $100
• B) $102
• C) $1,211
• D) $1,422

9.A buyer can afford no more than $1,000 per month in mortgage payments. A mortgage is available is 4%, 30 years, fully amortized, level payments. What is the maximum amount the buyer can borrow?

• A) $300,000
• B) $209,461
• C) $207,504
• D) $270,384

10.You have an investment account that pays an annual return of 10% per year, paid annually at the end of the year. The beginning balance is $1,000. How much money will you need to place in the account at the beginning of each year to be able to afford that $5,000 trip to Europe you are planning in three years?

• A) $1,175.22
• B) $1,333.33
• C) $1,108.46
• D) $1,208.46