You have a choice between the following two options: a lump-sum payment of $100,000 or an annual instalment of $10,000 over the next 20 years. At what interest rate, r, will you be indifferent between these two options?

Select one:

a.10.00%

b.7.75%

c.5.56%

d.2.74%

e.50.00%

Fixed-rate preferred stock is an example of

Select one:

a.an annuity due.

b.a growing annuity.

c.a perpetuity.

d.an ordinary annuity.

e.a growing perpetuity.

What is the effective annual rate (EAR) for a loan with a quoted rate of 7% APR compounded weekly?

Select one:

a.7.00%

b.7.12%

c.7.19%

d.7.22%

e.7.25%

When you go into a car dealership to buy a car, the car salesman must quote the financing rate in terms of

Select one:

a.effective annual rate.

b.effective periodic rate.

c.periodic percentage rate.

d.annual percentage rate.

e.annual market rate.

Juliet has a 10-year mortgage of $350,000 with an interest rate of 4.5% APR, compounded semi-annually. Mortgage payments are made at the beginning of each month. What is the monthly mortgage payment?

Select one:

a.$3,606.93

b.$3,620.33

c.$4,927.58

d.$4,941.91

e.$221,962.27

A 10-year investment will pay $2,500 at the end of this year, and the payments will grow at a rate of 5% per year. The required return is 15%. What is the present value of this investment?

Select one:

a.$10,170.40

b.$12,228.16

c.$14,934.05

d.$25,000.00

e.$25,714.29

An investment will pay $25 per year (indefinitely), starting in one year's time. The annual payments will grow at a rate of 3% per year. If the price of this investment is $200, what is its rate of return?

Select one:

a.11.25%

b.14.00%

c.14.25%

d.15.00%

e.15.50%

Mike Smith just turned 16 years old. He wishes to buy a used car in one year, and he is willing to spend $5,000. He plans to work part-time and put all his monthly earnings into a bank account that will pay 0.5% interest per month. How much must he save per month to be able to purchase the car in one year?

Select one:

a.$754.72

b.$416.67

c.$405.33

d.$333.33

e.$323.85

Given the following information, calculate the rate of return.

price = $501.88

time to maturity = 10 years

annual payment = $100

type = ordinary annuity

Select one:

a.11.65%

b.12.00%

c.15.00%

d.15.73%

e.20.09%

What is the effective annual rate on an investment that pays an interest rate of 8.25% continuously?

Select one:

a.6.5%

b.6.7%

c.6.4%

d.4.5%

e.8.6%