Suppose you deposited $250 al the end of 2011,2012, 2013 and 2014. How much would you have in your account on 1 January 2015, bused armal compounding of 8% by your bank? A. $1025.25 B. $1235.53 C. $1183.53 D. $1126.53 You want to deposit amounts in the bank at the end of 2011, 2012, 2013 and 2014, so that you have $1259.71 in your account on I Janaary 2015 calculate how lurpe each of your pomnts would need to be ir the bank compounds qanerly at 8% pa A. $279.56 B. $259.83 C. $284.19 D. $314.93 Assume that you will require $1000 in four yeant time Suppose thuit you can affond o deposit only $186 29 ag the end of each yea, the first depeosit to be made in ons year's time. W'hat interest rate would you roqaire to reach your fanget if the bank compounds anually? A. I 5% pra. B. 18.5% pa C-20% .. D. 22.5% pa. You have a goal to ise $1000d our years time. If your mother gives you 5400 at the end of the first ycar, you nake sii deposits of oqual amounts every six mocths thereaftor, and all the monwy is deposited in a each of the sis paryments be for you to reach your target? A. $74.46 B. $65.55 C. $82.74 D. $77.26 Gialmthe effective-aal imrest eate corresponding to iz% pa, eoayomkd qurtety. A.11.9% B. 12.55% C. 12.45% D. 12.71% What is the present value of$500 payable i10 years' time if the interest rate is 6% pat A. $290.50 B. $335.60 C. $895.40 D.$279.20 26. What is the present value of the following cash flow stress discounted at 7% pa: Year lS100; Year 2.400; Years 3 through 20, S300? A. $2859.20 B. $3563.40 C. $3078.63 D. $2782.40 27 what s the implied interest rate if you bornow $85 000 and promise so pay back $201 229 at the end of 10 years? A.956 p.a. B. 18% pa. C. 11% p.a. D. 13% pa. 28. Karm has borrowed S12000 in student loans aanannual interest ratc of9% If she repays S 1500 per annum, how long(to the nearest year) will t take to repay the loan? A. 10 years B. 15 years C. 12 years D. 17 years 29, irthe nominal interest rate is 12% p. and the inflation rate is expected to be ySpa, what is the real rate of merest? A. 106.7% C.796 D. 82% 30. lfaterm depositoffers an interest rate of 10% pa, compounding continuou year? y how much will an initial investment of$50 000 be worth A. $SS 258 B. $135 914 C.$62 519 D. $98 352 31. What is the effective annual interest tale oorresponding to anominal inerest rate of 10% pa, compounding ont nously? A. 10.5% B. 10.9% C. 12.5% D.13% 32. Calculate the value of an investment at the end of its Sourth ycar if the initial imvestment is $10 000 and it peoduces the following annual rates of return: Y. pain lSSk Year 2, gain ime Year 3, Iona S% Year 4, gain 4% A.$14 295 B. $13 100 C. $13 293 D. $11 957 33. Calalle the present value of the following cash flows assuming they occur 000k Year I, 35670Yeor 2, 311 250 the end ofeach year and the interest rate is 12%P.Yearadi2 A. $2030.93 B. $26 030.93 C. $28 920 D. (S1163.19) 34. Cakulalethepresent valug ofagmemment socarity that promises to pay S100pa f rever, msuminganinteres nle er 11% annum. A. $90 B. $1100 C. $909 D. Infinity. 35. Debt Ltd borrowed $100 000 from its local bonk to finance the p fixed interest rate of 10% pa llow much is each annual payene purchase of new equipment. Aanual payments are requieed over five years at a A. $27 398.18 B. $20 000.00 C.$26 379.75 D. $24 444.12 36. Debt Lid borrowed $100 000 from its local bank to finance the purchase of new oquipment Arnual payments are required over five years at a fixed interest rate of 10% pa How much is each annual payment? A. $27 398.18 B. $20 000.00 C.$26 379.75 D. $24 444.12 37 Five years ago, you entered into a loan agrocment to bormow $100 000. The loan was to be paid off over 20 years through equal monhly instalments. If tho interest tate was flued at 12% pi for the estire loan sam, how much do you per month? A. $949 B. $1066 C. $1101 D. $1223 38. John has just been employed by a peestiglous firm, drawing an ansual salary of 5300000, paid at the end of each year. He plass to work for five years before retiring, He buys a new laxury home with mortgage repay ments of $5000 per morth Sor the nexd 20 ycars (pryable at the end of each month), and donates $10 000 per annum forever to his farvourite charity, What annual amount, is present value erms, can John withdraw for the fest five years of his reticement from the remainder of his savings? Assume an arnual interest rate of % pa A. $93 926 B. $246 819 .$94 754 D. $112 754 39 Kristy has to make rental pary ments of $1000 at the start of every month, throughout the four-year duration of her university course. Her univensity fees are $4000 to be paid at the start of each year. She carns S1500 per moeth (paid at the end of each month) from a part-time job. Assume an merest rate of 8% paind that she keeps the part-timejob for the next four years. How much money, in present value terms, can she withdraw each month for the next four years? A.$144 B. $126 C.$55 40. per moeth for the next 25 years, after which he retires During the firs five years of retirement, he withdraws $6000 at the start of each moeth, afher which be dies. His son, Sean, inherits the the amount of the monly paryments that Sean receives remainder of Matthew's savings. It is further stipulated in Mathew's will thet the moscy in equal payments at the start of every monh, for the next 20 years Given a fixed interest rate of 9%pa, calculate A. $98 250 B. $97 340 C. $98 270 D. $97 519 41 le has to pay $5000 ni.5 years' time. Ifthe interest nic "15%pa, oompounded continuously. how much dors she owe in presont value A. $46 387 B. $49 077 C. $39 926 D. $37 041 42. If you have achieg to cam "imple intreir en S2000 frthree years at g% orannually oomponding intere. at5%for three yon which an will pay more intcrest and by how uch? A. Simple interest by $50.00 B. Compound interest by $122.97 C. Compound interest by $145.78 D. Simple interest by $150.00 Your parents give you $120 per week for living expenses while you are doing a threeyear degree n finance.If the interest rate is 6 annum, what is this cash flow worth when you start your degree? or living expenses while you are doing a three-year degree in finance. If the interest rate is 6.5% per A. $15 125 B. $16 998 C. $26 026 D. $27 330 what is the difference between daily and monthly compounding for a nominal interest rate of 7% per annum? A. 0.06% B. 0.04% C. 0.02% D. 0.01% 45