You have just taken out a $35,000 car loan with a 6% APR and 3 equal annual payments. The loan is for three years. When you make your first payment in one year, how much of the payment will go toward the principal of the loan? A. $7,993.84 B. $12,993.84 C. $9,993.84 D. $10,993.84

You plan to donate money to your alma mater to fund an annual $20,000 graduation party forever, starting one year from now. Before accepting the money, however, the student association has asked that you increase the donation to account for the effect of inflation on the cost of the party in future years. Although $20,000 is adequate for next years party, the students estimate that the partys cost will rise by 5% per year thereafter. To satisfy their request, how much do you need to donate now, given an interest rate of 7% per year? A. $1,000,000 B. $700,000 C. $300,000 D. $100,000

What is the real interest rate given a nominal rate of 8.3% and an inflation rate of 2.8%? A. 9.6% B. -5.5% C. 11.1% D. 5.5%

If the interest rate is 5%, the one-year discount factor is equal to ____________. A. 0.8817 B. 1.1378 C. 0.9524 D. 0.7179