**Please show your work.

1) Phil can afford $160 a month for 5 years for a car loan. If the interest rate is 4.4 percent compounded monthly, how much can he afford to borrow to purchase a car?

	$7,707.28
	$8,448.00
	$8,603.27
	$8,775.33
	$9,600.00

2) Atlas Insurance wants to sell you an annuity which will pay you $550 per quarter for 25 years. You want to earn a minimum rate of return of 5.0 percent compounded quarterly. What is the most you are willing to pay as a lump sum today to buy this annuity? rev: 10_28_2013_QC_37913

	$28,778.49
	$31,295.74
	$31,006.68
	$30,319.28
	$29,735.24

3) What is the present value of $14,150 to be received 3 years from today if the discount rate is 5.75 percent?

	$11,846.79
	$11,845.42
	$11,965.07
	$7,382.61
	$12,653.06

4) The interest rate expressed as if it were compounded once per year is called the _____ rate.

	stated interest
	compound interest
	effective annual
	periodic interest
	daily interest

5) Wicker Imports established a trust fund that provides $171,700 in scholarships each year for needy students. The trust fund earns a 4.00 percent rate of return. How much money did the firm contribute to the fund assuming that only the interest income is distributed?

	$4,039,757.60
	$4,292,500.00
	$3,434,000.00
	$6,868,000.00
	$5,151,000.00