1. what is the approximate PV of a 6-year ordinary annuity due whose annual payment is $3,000, if the annually compounded rate is 7%?
2. What is the t = 6 time value of an ordinary 8-year annuity whose payments grow at 1%, if the first payment is $1,200, the interest rate is 5% and it is compounded annually.
3. If the nominal semi-annually compounded interest rate is 10%. what is the approximate FV of $3,000 in 10 years from today? (t=10?)
4. As the risk adjusted discount interest rate becomes lower, the difference between the PV of an ordinary annuity and the PV of the corresponding annuity due........ a) Becomes greater b) remains the same c) becomes lower
5. All else equal, when a firm undertakes riskier projects, it causes a wealth transfer. a) from management to bondholders b) from stockholders to management c) from bondholders to management d) from management to stockholders e) from stockholders to bondholders f) from bondholders to stockholders
6. Assume a $250,000 mortgage with APR = 12%. In Addition, the loan is a 10-year balloon with a 35 year amortization. what will the balloon payment equal?