View History Bookmarks Develop Windows Help D Sun & Help Save & Sant Check my werk Problem 4-35 Solving for Rates (LG4-7) You wested $2.000 in the stock market one year ago. Today, the investment is valued at $100 What retum did you earn? Negative answer should be indicated by a mission What return would you need to 2 decimal places next year to break even over Dometround intermediate calculations 7 8 9 0 View History Bookmarks Develop Window Help derm Help Save Exit Sub Check my work Problem 4-32 Solving for Time (LG4-8) How long will take $2.000 to reach $4.400 when it grows at 11 months to 1 decimal place) (Do not round Intermediate calculations. Round a WTER Tulio e Problem 5-7 Present Value of an Annuity (LG5-4) What's the present value of a $830 annuity payment over six years if interest rates are 10 percent? (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Present value Problem 5-15 Effective Annual Rate (LG5-7) A loan is offered with monthly payments and a 12.50 percent APR. What's the loan's effective annual rate (EAR)? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Effective annual rate Problem 5-26 Present Value (LG5-4) You are looking to buy a car. You can afford $620 in monthly payments for five years. In addition to the loan, you can make a $720 down payment. If interest rates are 8.75 percent APR, what price of car can you afford (loan plus down payment)? (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Present value Problem 5-23 Present Value of Multiple Annuities (LG5-4) A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $2,100 per month for the next three years and then $4,200 per month for two years after that. If the bank is charging customers 7.75 percent APR, how much would it be willing to lend the business owner? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value Problem 4-13 Present Value with Different Discount Rates (LG4-4) Compute the present value of $850 paid in three years using the following discount rates: 5 percent in the first year, 6 percent in the second year, and 7 percent in the third year. (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Present value Problem 4-7 Compounding with Different Interest Rates (LG4-3) 2.5 points A deposit of $430 earns the following interest rates: 10 percent in the first year. 8 percent in the second year. 7 percent in the third year. eBook What would be the third year future value? (Round your answer to 2 decimal places.) Hint Print Future value References Problem 5-46 EAR of Add-On Interest Loan (LG5-7, LG5-8) To borrow $1,650. you are offered an add on interest loan at 8.1 percent with 12 monthly payments. Compute the 12 equal payments. (Round your answer to 2 decimal places.) Equal payments Use the amount you borrowed and the monthly payments you computed to calculate the APR of the loan. Then, use that APR to compute the EAR of the loan. (Do not round intermediate calculations and round your answer to 2 decimal places.) EAR Problem 5-22 Present Value (LG5-3) Given a 5 percent interest rate, compute the present value of payments made in years 1, 2, 3, and 4 of $1,050, 51,350, $1,350, and $1,450, respectively. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value Problem 5-24 Present Value of Multiple Annuities (LG5.4) A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $2,800 per month for the next three years and then $1,800 per month for two years after that. If the bank is charging customers 9.25 percent APR, how much would it be willing to lend the business owner? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value MC Qu. 15 Solving for Rates What annual rate of return is earned on a $amt... Solving for Rates What annual rate of return is earned on a $2,100 investment when it grows to $4,700 in nineteen years? Problem 5-53 Loan Balance (LG5-9) Rachel purchased a car for $18,500 three years ago using a 4-year loan with an interest rate of 90 percent. She has decided that she would sell the car now, if she could get a price that would pay off the balance of her loan. What is the minimum price Rachel would need to receive for her car? Calculate her monthly payments, then use those payments and the remaining time left to compute the present value (called balance) of the remaining loan. (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Minimum price Problem 5-4 Future Value of an Annuity (LG5-2) What is the future value of a $610 annuity payment over six years if interest rates are 10 percent? (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Future value Problem 5-1 Future Value (LG5-1) Compute the future value in year 7 of a $2,200 deposit in year 1, and another $1,700 deposit at the end of year 4 using a 8 percent interest rate. (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Future value Problem 4 and 5-6 Present Value and Annuity Payments A local furniture store is advertising a deal in which you buy a $4,200 living room set with three years before you need to make any payments (no interest cost is incurred). How much money would you have to deposit now in a savings account earning 4 percent APR, compounded monthly, to pay the $4,200 bill in three years? (Do not round Intermediate calculations and round your final answer to 2 decimal places.) Present value How much would you have to deposit in the savings account each month to be able to pay the bill? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Annuity payment Problem 5-33 Annuity Interest Rate (LG5-8) What's the interest rate of a 5-year, annual $5,300 annuity with present value of $21,500? (Use a time value of money calculator or a spreadsheet. Round your answer to 2 decimal places.) Annuity interest rate Problem 4-23 Comparing Cash Flows (LG4-5) What would be more valuable, receiving $700 today or receiving $875 in four years if interest rates are 9 percent? receiving $875 future receiving $700 today Problem 5-16 Effective Annual Rate (LG5-7) A loan is offered with monthly payments and a 14.00 percent APR. What's the loan's effective annual rate (EAR)? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Effective annual rate % Problem 5-36 Annuity Interest Rate (LG5-8) What annual interest rate would you need to earn if you wanted a $600 per month contribution to grow to $50,500 in six years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Annual interest rate Problem 4-29 Solving for Rates (LG4-7) What annual rate of return is earned on a $1,000 investment when it grows to $3,500 in seven years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Annual rate of return Problem 5-47 Low Financing or Cash Back? (LG5-4, LG5-9) A car company is offering a choice of deals. You can receive $2,000 cash back on the purchase or a 3.4 percent APR, 5-year loan. The price of the car is $17,000 and you could obtain a 5-year loan from your credit union, at 7.4 percent APR. Since the cash back is used to reduce the size of the loan, the cost of the car is entirely paid for with the debt. Therefore, the true cost of each deal can be compared through the monthly payment Compute the monthly payment of each deal. Which one is cheaper? 3.4 percent APR offer $2.000 cash back offer MC Qu. 19 Solving for Rates What annual rate of return is implied on a $am... Solving for Rates What annual rate of return is implied on a $2,200 loan taken next year when $5,100 must be repaid in year 11? Multiple Choice 877% 13.18% 794% 1988