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Suppose you take out a $10,000 loan at a 6% nominal annual rate. The terms of the loan require you to make 12 equal end-of-month
Suppose you take out a $10,000 loan at a 6% nominal annual rate. The terms of the loan require you to make 12 equal end-of-month payments each year for 4 years, and then an additional final (balloon) payment of $4,000 at the end of the last month. What will your equal monthly payments be? a. $152.86 b. $145.22 C. $160.91 d. $137.96 Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. Your uncle offers to give you $120,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment? a. 7.21% b. 7.59% C. 8.41% d. 6.85% Jana has $375,000 and wants to retire. She expects to live for another 25 years, and she also expects to earn 7.5% on her invested funds. How much could she withdraw at the beginning of each of the next 25 years and end up with zero in the account? a. $28,243.21 b. $31,294.42 C. $29,729.70 d. $32,859.14
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