You just graduated and you expect to work for ten years and then to leave for the Australian "Outback" bush country. You figure you can save $1,000 a year for the first five years and $2,000 a year for the next five years. These savings cash flows will start one year from now. In addition, your family has just given you a $5,000 graduation gift. If you put the gift now and your future savings when they start, into an account that pays 8% compounded annually, what will your financial "stake" be when you leave for Australia 10 years from now. (Round to the nearest whole dollar)

A.

$16,651

B.

$20,000

C.

$28,393

D.

$21,432

E.

$31,148

You just took out a $12,000 loan for your small business. The loan has a four year term and repayment is in the form of four equal endofyear payments. The interest rate on the loan is 11.5%. What are your annual loan payments?

A.

$3,909.29

B.

$3,246.84

C.

$3,287.78

D.

$3,867.92

E.

$3,144.83

5year regular annuity has a present value of $1,000, and if the interest rate is 10%, what is the amount of each annuity payment?

A.

$315.38

B.

$240.42

C.

$263.80

D.

$300.20

E.

$346.87

Three years from now you will begin receiving annual payments of $7,200. This will continue for 14 years. At a discount rate of 5.8%, what is the present value of this stream of cash flows?

A.

$54,523.00

B.

$60,534.84

C.

$51,253.11

D.

$57,216.29

E.

$64,045.86

The present value of a $25,000 perpetuity at a 14 percent discount rate is: (Round to the nearest whole dollar)

A.

$285,000

B.

$178,571

C.

$350,000

D.

$219,298