Question 1 1 pts Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant? A bank loan's nominal interest rate will always be equal to or greater than its effective annual rate. Banks A and B offer the same nominal annual rate of interest, but A pays interest quarterly and B pays semiannually. Deposits in Bank B will provide the higher future value if you leave your funds on deposit. If an investment pays 10% interest, compounded quarterly, its effective annual rate will be greater than 10%. A 30-year, $150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20- year mortgage The present value of a 5-year, $250 annuity due will be lower than the PV of a similar ordinary annuity. Question 2 1 pts Which of the following statements is CORRECT? The proportion of the payment that goes toward interest on a fully amortized loan increases over time. If a loan or investment has annual payments, then the effective, periodic, and nominal rates of interest will all be different An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%. The present value of a 3-year, $150 ordinary annuity will exceed the present value of a 3-year, $150 annuity due. o If a loan has a nominal annual rate of 8%, then the effective rate will never be less than 8%. Question 3 1 pts You plan to save $320 per month starting today for the next 41 years "just to start the month off right." You feel that you can earn an interest rate of 10.2 percent compounded monthly. How much will there be in the account 41 years from today? 1,981.539.41 O 2,183,656.43 2,183,227.75 0 2384,916.09 O 2,405,187.88 Question 4 1 pts Your credit card company charges you 1.39 percent per month. What is the EAR on your credit card? O 17.35% O 18.92% O 16.68% 18.02% O 15.85%