Question 1a)

You want to purchase a boat that costs $40,000. You want to finance as much of the purchase as possible with a 5-year bank loan at 12% compounded monthly, but can only afford loan payments of $750 per month. How much will you need as a down payment to buy the boat? (Round to the nearest dollar)

	$6,284
	$4,637

	$5,147
	$3,523

Question 1b)

What are the payments on a $12,500, four-year bank loan at 12% compounded monthly?

	$4115.50
	$204.17

	$461.2
	$329.17

Question 1c)

Assume that you have just won $5,000,000 in the lottery and will receive $250,000 per year for the next 20 years. How much is your prize worth today if the interest rate is 8%?

	$1,072,731
	$2,185,219

	$2,454,525
	$1,165,250

Question 1d)

You want to purchase a beach house for $220,000 funding as much of the cost as possible with a home mortgage loan. Banks are currently offering standard thirty year mortgages at 8% (monthly compounding). Unfortunately, you can only afford payments of $1,500 per month. How much cash will you need for a down payment in order to buy the home? (Round to the nearest dollar)

	$11,142
	$13,778

	$17,457
	$15,575

Question 1e)

What would you be willing to pay today to receive $ 5,000 at the end of each year for the next 10 years if interest is earned at a rate of 8% compounded annually?

	$72,433
	$34,656

	$36,235
	$33,551

Question 1f)

Assume you want to pay off your $10,000, 30-month car loan after only the first 12 months of payments. With interest at 12% compounded monthly, how much will you need pay off the loan in full at the end of the first year?

	$7425
	$4,361

	$6,354
	$5,639

Question 1g)

A consumer loan that charges 1.50% interest per month has an annual percentage rate of

	19.56%
	15.0%

	18.5%
	none of the above.