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x The Correct answer is bold, please show the steps to solve each question. 8. Houses generally go up in value, cars generally go down
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The Correct answer is bold, please show the steps to solve each question.
8. Houses generally go up in value, cars generally go down in value. If you buy a car for $30,000 today and it decreases in value 4% per year, how much will the car be worth in 10 years? A.S 18,000 B. 19,945 C. S 20,123 D. S20,241 E. 20,982 9. One bank will pay you 5.4% interest compounded annually. If you invest S1000 today, what simple interest rate would you need ta cam at a competing bank to have the same amount of money in 5 ycars? B. 6.0% C. 6.4% E. 7.0% 10ane perpctuite pays $1000 per year and starts in 1 year. Another perpetuity pays $1000 per year and starts in 5 years. What's the difference in the present values of the two perpetuities today if the discount rate is 10%? A. S3012 B. S3170 C. S3487 D. $3566 E. $3791 11. An account was opened with S1,000 10 years ago. Today, the account balance is $1,800. If the account paid interest compounded semianaually, how much interest on interest was earned? A. $219.20 B. S212.27 C. S203.49 D. S198.78 E. $194.60 12. If a bank offers to pay you a 3% APR compounded continuously, how much do you need to deposit today to have $10,000 in 20 cars? A. $5212 B. $5384 C. S5488 D. S5520 E. S5537 You buy a car today for S27,000. If you finance it with a 6% APR, 4 year loan, what will your monthly payments be? Assume monthly compounding. 13. A. S692 B. $681 C. $658 D. S634 E. $603 14. You buy a car today for S27,000. If you finance it with a 6% APR, 4 year loan, what is the difference in your payments if you agrcc to pay at the beginning of cach month rather than at the end? Assume monthly compounding. A. $3.15 B. $3.39 C. $3.77 D. $3.87 E. $3.98 15. You are saving to buy a car. You can save $200 per month and would likc to buy the car in 4 years. How much more car can you afford if you make your deposits at the beginning of each month rather3 than at the end? Use 6% APR with monthly A. S41 B. S44 C. S54 D. S57 E. S64 16. An investment will pay you $4000 each year for the next 8 years. The investment yields 6% APR, compounded quarterly. How much is the investment worth in 8 ycars? C. S39,590 D. S39,784 E. S40,440 A. S37,723 B. $38,600
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