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Problems 1) A $9,000 loan will require interest payments of $4,000 per year for 3 years. Calculate the compound interest rate on this loan. I

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Problems 1) A $9,000 loan will require interest payments of $4,000 per year for 3 years. Calculate the compound interest rate on this loan. I 2) You are planning to invest $100 each year for four years and will earn 10 percent per year. Determine the future value of this annuity due problem if your first $100 is invested now. 3) Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity due problem if your first $5,000 is invested now. 4) What is the present value of a five-year lease arrangement with an interest rate of 9 percent that requires annual payments of $10,000 per year with the first payment being due now? 5) Solve for the interest rate involved in the following future value of an annuity due (FVAD) problem. The future value is $57,000, the annual payment is $7,500, and the time period is 6 years. Multiple Choice 1) Which of the following is the amount or value today of a savings or an investment? a) Present value b) Future value c) Compound value d) Time value 2) "Simple interest" is interest earned only on an investment's a) Interest b) Principal c) Principal and interest d) All of the choices are correct 3) When interest is earned on interest in addition to interest being earned on the principal amount of an investment, what is this called? a) Simple interest b) Compound interest c) Basic interest d) Inflation interest

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