Todd can afford to pay $320 per month for the next 5 years in order to purchase a new car. The interest rate is 5.4 percent compounded monthly. What is the most he can afford to pay for a new car today?

$21,985.51

$15,953.78

$17,353.24

$16,549.03

$16,793.46

2

21

You plan to save $6,100 per year for the next 9 years. After the last deposit, you will keep the money in the account for 2 more years. The account will earn an interest rate of 6.4 percent. How much will there be in the account 11 years from today?

$71,268.13

$141,011.10

$80,682.37

$12,590.40

$93,272.77

3

31

Starling wants to retire with $1,910,000 in his retirement account exactly 32 years from today. He will make annual deposits at the end of eachyear to fund his retirement account. If he can earn 8.93 percent per year, how much must he deposit each year?

$11,809.72

$10,505.02

$59,687.50

$10,841.57

$12,597.04

4

41

Travis International has a debt payment of $2.28 million that it must make 4 years from today. The company does not want to come up with the entire amount at that time, so it plans to make equal monthly deposits into an account starting 1month from now to fund this liability. If the company can earn a return of 5.03 percent compounded monthly, how much must it deposit each month?

$42,801.37

$45,846.16

$47,500.00

$42,980.78

$44,062.59

5

51

Thom owes $6,200 on his credit card. The credit card carries an APR of 17.9 percent compounded monthly. If Thom makes payments of $200 per month, how long will it take for him to pay off the credit card assuming that he makes no additional charges?

31.00 months

41.92 months

39.12 months

45.14 months

11.41 months

6

61

You have a credit card with a balance of $16,900 and an APR of 19.1 percent compounded monthly. You have been making payments of $315 per month, but you have received a substantial raise and will increase your monthly payments to $390 per month. How many months quicker will you be able to pay off the account?

47.71 months

40.90 months

10.32 months

44.53 months

42.94 months

7

71

The value today of the following cash flows is $5,529.59 at an interest rate of 3.7 percent. What is the value of the Year 3 cash flow?

Year	Cash Flow
1	$ 1,350
2	1,425
3	?
4	1,980

$1,258.99

$1,190.45

$3,215.38

$774.59

$1,327.54

8

81

Your grandparents would like to establish a trust fund that will pay you and your heirs $135,000 per year forever with the first payment 12 years from today. If the trust fund earns an annual return of 2.6 percent, how much must your grandparents deposit today?

$5,192,307.69

$4,326,923.08

$3,719,158.87

$3,915,069.28

$4,792,899.41

9

91

You have just leased a car that has monthly payments of $405 for the next 3 years with the first payment due today. If the APR is 7.8 percent compounded monthly, what is the value of the payments today?

$13,046.67

$11,860.61

$13,550.49

$12,570.03

$12,962.41

10

101

Roger has just lost a lawsuit and has agreed to make equal annual payments of $14,100 for the next 8 years with the first payment due today. The value of this liability today is $89,000. What is the interest rate on the payments?

7.42%

6.35%

5.29%

5.59%

6.90%

11

111

Your credit card company charges you 1.36 percent per month. What is the APR on your credit card?

15.50%

18.48%

17.60%

16.32%

16.96%

12

121

You are considering the purchase of new living room furniture that costs $1,200. The store will allow you to make weekly payments of $26.18 for one year to pay off the loan. What is the EAR of this arrangment?

28.76%

25.34%

27.05%

30.20%

24.07%

13

131

You are set to receive an annual payment of $12,800 per year for the next 15 years. Assume the interest rate is 7.7 percent. How much more are the payments worth if they are received at the beginning of the year rather than the end of the year?

$8,055.92

$8,592.98

$7,653.12

$8,324.45

$9,022.63

14

141

Assuming an interest rate of 6.7 percent, what is the value of the following cash flows four years from today?

Year	Cash Flow
1	$ 3,325
2	4,300
3	6,210
4	8,365

$24,486.13

$25,182.40

$22,968.65

$23,925.68

$25,878.67

15

151

Your parents are giving you $220 a month for 4 years while you are in college. At an interest rate of .51 percent per month, what are these payments worth to you when you first start college?

$9,034.23

$9,173.42

$11,930.53

$8,878.47

$9,345.76