Q1:

Jill borrows $300,000 for 10 years at a fixed interest rate of i % p.a (EAR). If the loan is repaid in 10 equal year-end payments over the 10 years, the amount of the loan outstanding at the end of the 5^th year will be:

Select one:

a. Equal to $150,000

b. Less than $150,000

c. Greater than $150,000

Q2:

Jack deposits the following amounts in a savings plan which pays 5.4% per annum, compounded monthly:

• $2435 today,
• $1400 at the end of year two and
• $2600 at the end of year three.

The amount he will have in exactly 3 years is closest to:

Select one:

a. $6939.68

b. $6789.55

c. $7021.47

d. $6926.75